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Monday 14 March 2011

Rajasthan Budget 2011-12
Salient feature of tax proposals
By- CA Brij Gopal Daiya
Distinctive features of the budget
} Power outlay 12,067/- crore, i.e. about 23% of the total budget. New capacity addition 2670 Mega watt. No power cut.
} Hydrology and Water Management Institute in Bikaner. Rail over bridge –Choukhunti-20 crore allocated.
} Additional Water treatment plant in Bikaner for 400 lacs lts per day with 20 crore outlay.
} Rajasthan Knowledge Corporation-free computer training for ladies. Fee shall be borne by government.
} 50,000 New teachers job for primary and 25,406 for secondary & others. 300 Sanskrit teachers job.
} Coaching facility for 7000 students for Pre-Engineering & Pre-Medical Examinations through stcom.
} Good governance by E-governance –Expending 300 crore on computerisation of government departments.
} Rajasthan State wide area network with outlay of 120 crore.
Changes in the RVAT Act 2003
} Deemed assessment for the Financial Year 2009-10, if returns are filed before 31/3/2011. No interest and penalty shall be levied.
} VAT Audit report filing date for Financial Year 2010-11 extended upto 31/3/2011.
} Place of business-Any warehouse, Railway station, Yard, & Parcel office where the goods are for transportation in the course of the business.
} Definition of works contract aligned with CST Act.
} Contractors are brought under composition scheme u/s 3(2).
} Composition dealers- turnover limit raised from Rs. 50.00 lacs to 60.00 lacs. One suggestion-Dealer should be allowed to opt for the same at any time during the year as the exist is allowed.
} Capital goods. No ITC on machinery used in mfg of VAT free goods.
} Capital goods-ITC entitlement-only when production is starting with help of items bought.
} ITC restricted to output tax when sold at subsidised / credit note received.
} MRP goods –Quantity discount, incentive shall be included in taxable turnover.
} No guarantee need to be furnished by Government department, public sector undertaking for stay of demand, appeal and revision.
} Penalty provision for late filing of return in section 58, deleted. Now, replaced by late fee provisions in section 21 and rule 19A.
} Delayed filing of return –For monthly taxpayer -Late fee Rs. 100/- per day for first 15 days, then 500/- pd. Not exceeding 50,000/-. Others, Rs. 50/- per day not exceeding Rs. 5000/-.
} Evasion cases- Six month time limit for completion of assessment to start from date of issue of 1st notice u/s 25 and not from date of survey.
} Clearing and forwarding agents to file monthly/quarterly information in VAT-63
} Settlement commission shall be revitalised.
} DRI shall be made functional. Power delegated by making suitable provision in section 97B.
Changes in the RVAT Rule 2006
} Dealer with tax liability of between 20,000/- & 40 crore in immediately preceding year, to pay tax monthly by 14 of the next month. Tax liability more than 40 core to pay for each 10 days by next 5 days. Composition dealer quarterly. Others quarterly with in 14 days.
} New Rule 19. Quarterly E-filing made compulsory for all dealers except few. Time allowed 45 days. Along-with VAT-07A & VAT-08A. File E-Acknowledgement in 15 days. Facilitate ITC verification.
} VAT10-A is now compulsory for all filing VAT-10.
} Declaration forms/ certificate may be submitted till 30.6.2011 for assessment completed till 31/3/2011.
} Digital signature by department where turnover is upto Rs. 60.00 lacs. Mention in budget speech only.
} Only yearly filing of VAT-11 for the dealers – Under Composition u/s 3(2), First point taxable goods, Lump sum tax u/s 5, MRP, Paying exemption fee u/s 8(3).
} Changes in the RVAT Rule 2006
} Form VAT-10 & VAT-11 changed. Welcome changes, more meaning information. CST-1 deleted and merged with VAT-10.
} Important-VAT-07, VAT-07A, VAT-08 & VAT-08A the VAT invoice shall be entered in the quarter in which the date of invoice falls.
Tax Rate changes
Items made exempted –
} Wheat, Rice, Pulses, Dal Basin,
} Namda, Hand made woolen carpet, Hand spun woolen yarn,
} Saji, Kerosin through PDS, Cooked food by charitable organisations
} Tawa, Kadai, sigdi, chimta, Imamdasta, Musli, Jhar, Chalni, Chakla, Belan, Gas lighter, Multani Mitti.
} Fresh vegetable & Fruits by companies exempt. “Except when sold by a company” deleted.
} Razai is now exempt, earlier exempted upto Rs. 750/- only. But razai cover left accidentally and now taxable at residuary rate.
} CISF & CRPF Canteens. Items upto Rs. 1000/- if not purchased against VAT invoice.
} Exhibition of films through analog projector or digital projector in a cinema hall or multiplexes; cable service; and direct to home broadcasting service.
Rates Reduced
} Desert coolers having body made of iron and steel 5% from 14%
} LED Lamp 5% from 14%.
} Outdoor caterer 5%
} Khadi units exemption to individual 50 lacs others 200 lacs.
} Concessional rate of 5% on Molasses purchases by cattle feed manufacturer.
Rates Increased-
} Air conditioners, refrigerator, All type of Motor vehicle and parts 14% to 15%. Entry tax deleted.
} Tobacco, its products and Pan Masala 20% to 40%
} Ratan jyot deleted form Industrial Input list hence taxable @ 14%.
} Mineral water and water in sealed container @15%
} Aerated water @ 15%.
} Aviation turbine fuel 14% to 20%.
Miscellaneous
} JCTO now authorized u/s 75 & 76 to exercise power in the jurisdiction assigned.
} Rule 17(2)-CST Rajasthan Rules- C Form can be submitted in 30 days of the end of the quarter. Earlier was with return CST-1.
} Government is in process to allow issue of CST declaration forms over internet. Fee for C Form waived on e-procurement. Rule 17F amended.
} Yearly dealer felicitation program-Highest tax payer in certain category. Bhamashahs shall be called “Raj Mitra”. Benefit of privileged card holder shall be available. No survey without commissioner approval, refund application 15 days, Forms same day and prompt audience from DC(Adm)/Commissioner.
} Rajasthan Investment Promotion Scheme-30% subsidy of tax deposited shall be paid 30 days through E-payment. Employment generation subsidy raised to from 10 to 15 thousand per person p/y. From 15 to 18 for Ladies/SC/ST.
} Single window scheme for industry, investment exceeding 10 crore now in all districts.
} GST likely by next financial year. Centre bringing legislation in this session of parliament. State shall get share in service tax too. For meeting the training need-State Tax Academy is proposed.
} DLC Rates hiked by 15%. Surcharge on stamp duty 10%. Still we talk about affordable housing!!!