State Budget 2012-13 -Suggestion

The clouds of uncertainty loom large around commodities classification. The government should evolve suitable mechanism to resolve dispute in consultation with Trade and Industry representative. The following issues requires immediate attention:

Sugar Candy is exempted from tax, government should come forward with clarification on the issue so that large unjustified demands created are scrapped immediately.

Bikaner, Beawar and Kekdi are known world over for production of  Raw wool and Carpet yarn. Government supported the industry and exempted Raw wool. However the Carpet yarn left taxable @ 5%. It should be declared exempted. This is labor oriented industry and providing livelihood to large section of the society particularly rural poor. Move to exempt  carpet yarn from VAT would help the industry to regain its lost glory.

Our State is far behind from other States in the race of building infrastructure. The infrastructure sector is facing wrath of the department under the lack of clarity on issues relating to works contract. Following issues require immediate attention by clarification/simplification:

Issues in turnkey works contract are facing lot of uncertainty. Department is trying to destabilize  the settled issues. Despite the finance department notification permitting the bifurcation of turnkey works contract in two parts - supply part and civil work part, tax officials are treating the same as single contact and denying the benefit of non deduction of works contract on supply being made from outside the Rajasthan State. 

Majority of the High courts in the country has declared the rules relating to deduction of works contract tax on supply portion of the works contract as invalid. Since the same is either taxable under CST Act or is subject to local VAT. The Rajasthan Vat rules should be amended immediately as unnecessary deduction of tax entails refund at later stage impacting industry by huge blockage of working capital and tedious and expensive refund procedure. There is a urgent need to address this issue.   

The exemption route of taxing works contract is welcome by industry. However, the higher residual rate of 3% is big impediment  in acceptance of the exemption route. There should be more clarity on the issue. More  classification and reasonable rate structure should be formulated in consultation with industry and keeping in the view the fact of exempted labor portion and material like bricks. 

The assessment and refund cases of contractor dealer should be completed within one year from the end of the financial year. This would save government of huge interest burden and serve industry by releasing blocked working capital.


The Application for exemption certificate by contractor and issue of exemption certificate by the department should be made online. This will expedite process and reduce harassment. 


The VAT-10 should be suitably modified to take care of peculiarities of works contract dealer. 

वैट बजट पूर्व सुझाव Year 2012-13

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2   oSV fooj.kh ¼fjVuZ½ nsjh ls Hkjs tkus ij ysV Qhl dk Hkqxrku djuk gksrk gSA ekfld djnkrkvksa ds dsl esa igys 15 fnu 100@& :Ik;s izfrfnu rFkk ckn esa :Ik;s 500@& izfrfnu tks ds VSDl dk 30 izfr’kr ;k 50]000@& tks Hkh de gks] ls vf/kd ugha gS A ekfld djnkrkvksa ds vykok dsl esa YksV Qhl 50@& :Ik;s izfrfnu rFkk vf/kdre :Ik;s 50]000@& ds izko/kku gSA ysV Qhl dh LFkku ij ‘’kkfLr ds izko/kku tSls dh iwoZ esa Fks yk;s tkus pkfg, A ‘’kkfLr dh njksa dks de dj rdZ laxr cuk;k tk;s A

3   foHkkxh; oSc lkbV dks nqjLr fd;k tkuk t:jh gS A tc&tc oSc lkbV dh vko’;drk gksrh gS rc ­rc oSc lkbV Mkmu jgrh gS A QyLo:Ik O;ogkfj;ksa dks /kks"k.kk izi= tkjh djokus esa vuko’;d nsjh gksrh gS A iathdj.k dk;Z le; ls ugh gksrkA fjVuZ Hkjus dh vafre frFkh ls 3&4 fnu iwoZ ls loZj Mkmu gks tkrk gS A loZj vkWu Vkbe ds eqdkcys esa loZj Mkmu Vkbe T;knk gksrk gS A

4   orZeku esa lHkh O;olkb;ksa dks =Sekfld fjVuZ vkWuykbZu nsuk t:jh gS A NksVs O;kikfj;ksa dh lqfo/kk ds fy,] tgka okf"kZd dj ns;rk :Ik;s 20]000@& ls de gS dsoy okf"kZd fooj.kh dk izko/kku fd;k tk dj] vuko’;d >a>Vksa ls eqfDr nh tkuh pkfg, A  

5   Mhyj MkVk csl izLrqr djus dh vafre frFkh dks 30-6-2012 rd c<+k;k tkuk t:jh gS A blds fy, iSu dkMZ ,ao cSad [kkrk fooj.k dh vfuok;Zrk dks gVk;k tkuk pkfg, A NksVs O;kikfj;ksa ds cSad [kkrs ugha gksus ls lwpuk izsf"kr ugha gks ikrh gS A

6   MhEl ,lslesaV ;kstuk dk ykHk foHkkxh; vf/kdkfj;ksa }kjk ml ea’kk ls ugha fn;k tk jgk tks fd ekuuh; eq[;ea=h th ds funsZ’k ij vk;qDr egksn; us /kksf"kr dh gS o"kZ 2009&2010 esa dfri; esa izdj.kksa dks blfy, MhEM ;kstuk ls ckgj dj fn;k x;k gS fd mudk tek VSDl] vkxs yk;s x;s vkbZ-Vh-lh- de gksus ds dkj.k] de jg x;k gS A ,sls izdj.kksa esa iwoZoÙkhZ o"kZ ds vkns’k la’kksf/kr fd;s tkdj ekaax jkf’k dk;e dh tk ldrh gS A rnuqlkj o"kZ 2009&2010 dk tek dj lgh gks tkus ls MhEM ;kstuk dk ykHk O;ogkjh dks fey ldrk gS A foHkkxh; vf/kdkfj;ksa dks bl fn’kk esa lg;ksx ds fy, funsZf’kr fd;k tkuk t:jh gS A

7- `इनपुट टैक्स क्रेडिट वापसी के लिए समय सीमा निर्धारित की जानी चाहिए-

8-  पंजीकरण प्रमाण पत्र में परिवर्तन हेतु दिए गए आवेदन पत्र का निस्तारण 15 दिन की अवधि में अनिवार्य रूप से किया जाना चहिये- देरी की स्तिथी में आवेदन स्वीकार मान लिया जाना चाहिए-

9-      भूल  सुधार आवेदन पत्रों को प्रत्येक वार्ड में एक रजिस्टर में तारीख अनुसार प्राप्ति एवं निस्तारण दर्ज किया जाना चाहिए- इन आवेदन पत्रों का प्राथमिकता के आधार पर निस्तारण किया जाना चाहिए-

10-     विभाग द्वारा अपने स्तर पर छोटे व्यापारिओं की सुविधा के लिए इ-फाइलिंग की सुविधा निः शुल्क दे जानी चाहिए-

  

  

Case Study On Sub-Contract

Facts: Larsen & Tourbo Ltd [L&T] is engaged in execution of civil works contract.  Registered dealer under the APVAT Act.   It entered an agreement with contractee for execution of work.  The same work has been sub-contracted to another registered dealer.

Held: There is only one transfer of property in goods, taking place from sub-contractor to contractee.  There is no transfer of property in goods from main contractor [L&T] to contractee.

Principles: By virtue of Article 366(29A)(b) of the Constitution once the work is assigned by the contractor [L&T], the only transfer of property in goods is by the sub-contractor(s) who is a registered dealer in this case and who claims to have paid taxes under the Act on the goods involved in the execution of works.  Once the work is assigned by L&T to its sub-contractor(s).  L&T ceases to execute the works contract in the sense contemplated by Article 366(29A(b)because property passes by accretion and there is no property in goods with the contractor which is capable of a retransfer, whether as goods or in some other form.  Even if there is no privity of contract between contractee and the sub-contractor, that would not do away the principles of transfer of property by sub-contractor by employing the same on the property belonging to the contractee.  This reasoning is based on the principle of accretion of property in goods.