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HindustanTimes Thu,02 Oct 2014

'Advance tax on stock' withdrawn in Punjab

HT Correspondent , Hindustan Times   Chandigarh, July 29, 2014
First Published: 17:13 IST(29/7/2014) | Last Updated: 21:33 IST(29/7/2014)

Punjab deputy chief minister Sukhbir Singh Badal on Tuesday ordered withdrawal of the amendment made in the first proviso to section 13 (1) of the Punjab VAT Act, 2005 for availing input tax credit and asked the excise and taxation department to draft an ordinance in this regard and present it for approval in the next meeting of the state cabinet.
 
Disclosing this, an official spokesman to the deputy CM office said traders associations had met Sukhbir Badal recently and apprised him of some suggestions into the said VAT act to check evasion of input tax credit (ITC). Keeping this in view Badal, who is also heading excise and taxation portfolio, has asked the department to extend the date of filing returns till August 20 and provide option to the traders to file their returns as per previous practice. "To redress the grievances of traders community State government will amend the clause 13 (1) of Punjab VAT Act by an ordinance," he added.
 
It is mentioned here that ITC is a concession granted by the state government against the output tax liability on the sale or purchase of goods within the state jurisdiction. During October 2013, the state cabinet had given nod to amend section 13 (1) of Punjab VAT Act and this amended proviso was also passed by the Punjab assembly in this budget session. The new amendment enshrines that ITC would not be available unless such goods were sold or used in the manufacturing or processing of goods meant for sale in the state.
 
The fundamental idea to amend VAT Act was to control the evasion of taxes that was skipping out of net due to bogus billings. The excise department has 2.49 lakh registered traders out of which only 1,063 traders pay more than Rs. 1 crore tax per annum that becomes 85% of the total VAT collection of Punjab. During the last fiscal 2.17 lakh traders paid tax less than Rs. 1 lakh per annum.

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