IMPORTANT CHANGES IN THE U. P. VAT ACT

(Amendments made by U. P. Act, 19 of 2010)

 

        Some important changes have been made in the provisions of the U. P. VAT Act, 2008 vide the Uttar Pradesh Mulya Samvardhit Kar (Sanshodhan) Adhiniam, 2010 (U. P. Act 19 of 2008). Text of the amending Act is available on official Web Site of Commercial Tax Department of Uttar Pradesh. The text can also be had by visiting UP VAT & ENTRY TAX NOTIFICATIONS page under login services of web site www.taxtalkindia.com. Details of important changes are given hereunder:

(1) INPUT TAX CREDIT:
 

In section 13, in sub-section (1), a new clause (f) has been added. This clause provides that where purchased goods are-

(i) re-sold at a price lower than the purchase price, then amount of input tax credit, admissible in respect of purchase of goods, shall be limited to tax payable on sale of such goods; and
(ii)
used in manufacture of any goods and such manufactured goods are sold at a piece which is lower than the cost price of the manufactured goods, then amount of Input tax credit, admissible in respect of purchase of goods, shall be limited to the amount of tax payable on sale of manufactured goods.
(2) VALIDATION OF OLD REGISTRATION CERTIFICATE:
 

        Proviso of sub-section (5) of section 17 has been replaced by a new proviso. Dealers, who had held registration certificate granted to them under the U. P. Trade Tax Act, 1948 but who, on commencement of VAT Act, for certain sufficient reason, could not get such registration certificate validated within the time provided in the sub-section, opportunity has been provided for getting their registration certificate validated for the purpose of VAT by presenting application for condonation of delay before the Zonal Additional Commissioner, Commercial Tax. But their application for condonation of delay will not be entertained unless they give proof that have -

(i)
if they present application on or before 31-12-2010, deposited late fee for the period of delay at the rate of rupees five hundred for each month or part thereof;
(ii)
if they present application after 31-12-2010, deposited late fee for the period of delay at the rate of rupees five hundred for each month for the period upto 31-12-2010 and rupees one thousand for each month or part thereof for the period after 31-12-2010;
(iii) submitted tax returns for all tax periods upto the date of submission of application; and
(iv)
deposited amount of tax shown due in tax returns of tax periods referred to in sub-clause (iii) above and interest thereon.
(3) ANNUAL RETURN FILING DATE
 

        Before commencement of the amending Act, Annual Return for any assessment year was required to be submitted on or before October 31 of the immediate succeeding assessment year and assessing authority was empowered to extend the time upto ninety days beyond October 31. By the amending Act, power of assessing authority for extending time has been withdrawn by omitting proviso of sub-section (7) of section 24 of the U. P. VAT Act. But it does not make any difference because such power of assessing authority already exists in U. P. VAT Rules.
        It is to be noted that power to assessing authority for extending time upto 90 days for submitting annual return beyond October 31, is already given in second proviso of sub-rule (7) of Rule 45 of the U. P. VAT Rules, 2008. Rule has not been amended. Therefore, power of assessing authority of extending time for filing annual return continues.

(4)
ASSESSMENT IN CASE OF UNREGISTERED DEALER WHO IMPORTS OR RECEIVES GOODS FROM OUTSIDE THE STATE OF U. P.
 

        In case of an unregistered dealer who imports or receives goods from outside the State of U. P., provision has been made for making separate assessment of tax each time he imports or receives goods.

(5) SEIZURE OF GOODS UNDER SECTION 48 OF THE U. P. VAT ACT, 2008
 

        Before amendment made with effect from August 20, 2010, under section 48 of the Act, goods could be seized, if –

(i) bona fide dealer was not traceable in respect of any goods; or
(ii)
where goods were traced to a bona fide dealer but such dealer has not accounted for such goods properly in his books of account; or
(iii) where goods were under valued to the extent of fifty percent or more.

        By amending sub-sections (2) and (5) of section 48, another ground for seizure of goods and for imposing penalty has been added as under:

        “documents issued by a bona fide dealer with respect to accompanying goods contain wrong particulars”
(6) PENALTY FOR NOT SUBMITTING TAX RETURN IN THE PRESCRIBED MANNER
 

        Entry (1) of Table of sub-section (1) of section 54 (section 54 relates to penalties) has been amended by bifurcating it in two parts as follows:

  1. The dealer has without reasonable cause failed, -
  (a)
to deposit the tax due for any tax period within the prescribed or extended time;            20 % of the tax payable; and
  (b)

to submit the tax return for any tax period in the prescribed manner :            Two thousand rupees.

(7) HEARING OF SECOND APPEAL BY THE TRIBUNAL
 

        Except an appeal against the order passed on stay application, all appeals, in which disputed amount of tax, fee or penalty exceeds two lakh rupees, irrespective of the authority who has passed order under second appeal, shall be heard and disposed off by a Bench of Two Members.
        The State Government has also been given power to enhance the monetary limit of two lakh rupees upto three lakh rupees by issuing notification.

(8) DATE OF ENFORCEMENT OF PROVISIONS:
 

        Provision relating to validation of Registration Certificate, granted under the U. P. Trade Tax Act, 1948 for the purpose of VAT, has enforced  with effect from January 01, 2008 and all other changes have been made applicable with immediate effect i.e. with effect from August 20, 2010.

   

DISCLAIMER: Though every care has been taken in compiling and interpreting the provisions yet the www.taxtalkindia.com owns no responsibility for any loss or damage that any user may suffer by using the material given above. Readers are advised to consult the original text of the amending Act given under login services on UP VAT & ENTRY TAX NOTIFICATIONS page.