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Delhi VAT Circular No. 9 Central Sales Tax Act 1956 – Framing of assessments

VAT, Indirect Tax, VAT – Delhi

Delhi VAT Circular No. 9 dated 9 June 2011 [No. F.6(85)-Policy-VAT-2011-147-154]

09 Jun 2011

Central Sales Tax Act 1956 – Framing of assessments

Section 9(2) of CST Act, 1956 empowers the assessing authorities to frame assessments in accordance with the provisions contained in general sales tax law of the appropriate state which is Delhi Value Added Tax act, 2004 in case of Delhi.

2. Circular for framing central assessments have been issued in the past also. Circular No. 13 of 2007-08 dt 30/01/08 and Circular No. 15 of 2006-07 dt. 30/03/07 may also be referred in this regard.

3. The time limit for furnishing statutory forms is three months after the end of each quarter to which the declarations or statutory forms relates. Second provision to Rule 12(1) of Central Sales Tax (Registration and Turnover) Rules, 1957 provides for covering all transaction of sale, which take place in a quarter of financial year between same two dealers. The prescribed time of three months is sometimes extended to a quarter or more than quarter at times centrally by Commissioner, VAT in exercise of the powers conferred under relevant provisions of Central Sales Tax (R and T) Rules, 1957 and DVAT Rules, 2005.

4. It has also come to notice that some assessing authorities are issuing manual assessment order in contravention of instructions contained in Circular No.15 of 2006/07.

 

 

5. In order to liquidate all pending assessments of deficient central statutory forms cases, it has been decided to adher to following time schedule:

S. No. Assessment Year Quarter Date by which assessments to be completed

1 2007-08 Qtr. II Qtr. III and Qtr. IV 30-06-2011

30-09-2011

 

2 2008-09 All Quarters 31-12-2011

 

3 2009-10 All Quarters 31-03-2012
4 2010-11 All Quarters 30-06-2012

 

6. If time permits, assessing authorities may take up the cases for assessment even before the dates indicated in Col. 4 above. However, no case pertaining to any year for deficiency of statutory forms should remain un-assessed beyond the dates indicated above, it shall be personal responsibility of each Assessing Authority in respect of their assigned work.

7. While taking up a case for assessment due to deficiency of statutory forms, other aspects like scrutiny of balance sheet (for dealer having GTO > Rs.40.00 lakh), timely filing of returns, timely payment of due tax under both the Acts, tax credit availed on purchased locally, adjustment of tax credit, reversal of tax credit on transfer of goods after local purchase, tally of return version with balance sheet etc., may also be looked into.

8. For dealers who are not engaged in central sale in particular period/year, no reconciliation is required.

9. This issues with the approval of Commissioner, VAT.

 

G.C. Tolani

VATO (Policy)

 

Point of Taxation in Service Tax

One major change made in service tax effective from 01-04-2011 is the introduction of Point of Taxation Rules, 2011 to (a) introduce the provisions relating to payment of service tax on accrual basis instead of receipt basis and (b) to specify date relevant for determining rate of service tax.

So far the provision was that service tax was payable on receipt basis i.e. on receipt of payment of the invoice or bill from the customer or receipt of advance, whichever is earlier. Now w.e.f.  01-04-2011, service tax will be payable on billing basis and not on ‘receipt of payment’ basis i.e. on accrual basis and not cash basis (option has been granted to assessee to continue payment on receipt basis upto 30-06-2011, if they so desire).

Scenario Relevant Rule First event Subsequent event Point of Taxation
Normal Situation (not covered under rule 4 to 9) 3(a) Issue of invoice Completion of service or receipt of payment Time of invoice
3(a) Completion of service Issue invoice within 14 days Time of Invoice
Proviso to 3(a) Completion of service Invoice not issued within 14 days Date of completion of service
3(b) and explanation to rule 3 Receipt of payment or advance Invoice or completion of service Time of receipt of payment
Taxable Service provided before change in effective rate of service tax 4(a)(i) Invoice issued and payment received after the change in effective rate N.A. Date of receipt of payment or date of issuance of invoice, whichever is earlier
4(a)(ii) Invoice issued prior to change in effective rate Payment received after change in effective rate of tax Date of issue of invoice
4(a)(iii) Payment received before change in effective rate of tax Invoice issued after change in effective rate of tax Date of receipt of payment
Taxable Service provided after change in effective rate of service tax 4(b)(i) Invoice issued prior to change in effective rate Payment received after change in effective rate of tax Date of receipt of payment
4(b)(ii) Invoice issued and payment received prior to change in effective rate Taxable Service provided Date of receipt of payment or date of issuance of invoice, whichever is earlier  
4(b)(iii) Payment received before change in effective rate of tax Invoice issued after change in effective rate Date of issuing of Invoice  
New service brought under tax net 5(a) Invoice issued and payment received before service became taxable N.A. No Service tax payable  
5(b) Payment received before service became taxable Issue invoice within 14 days of provision of service No Service tax is payable  
3(a) Service provided before tax became effective Invoice within 14 days and payment received after tax became effective No service tax is payable  
Continuous supply of service (applicable separately to each event as specified in contract) 6(a) Issue of Invoice Completion of service or receipt of advance payment Time of Invoice  
6(a) Completion of service Invoice issued within 14 days Time of Invoice  
Proviso to 6(a) Completion of service Invoice not issued within 14 days Date of completion of service  
6(b) and explanation 2 to rule 6 Receipt of payment or advance Invoice or completion of service Time of receipt of payment  
Export of Service 7(a) Completion of service Payment received within the period specified by RBI Date of receipt of payment  
7 (a) and first proviso to rule 7 Completion of service Payment not received within the period specified by the RBI As per rule 3,4,5,6 or 8 (as applicable) Interest will be payable.  
Service where tax payable by recipient of service under reverse charge 7(b) Receipt of Service Payment made to service provider in advance or within six months of date of invoice or service provider Date of payment  
7 (b) and second proviso to rule 7 Receipt of Service Payment not made to service provider in advance or within six months of date of invoice or service provider As per rule 3,4,5,6 or 8 (as applicable) Interest will be payable.  
Professional and firms providing specified taxable service 7 (c) Invoice, completion of service or receipt of payment in any sequence   Date of receipt of payment  
Service Provided from associate enterprises when service provider outside India Third proviso to rule 7 Date of credit in books of account of person receiving service Date of making payment Date of credit in books of account of person receiving service  
Third proviso to rule 7 Date of making payment Date of credit in books of account of person receiving service Date of making payment  
Intellectual property service, where consideration not ascertainable at the time of service 8 Receipt of payment or benefit is received by service provider Invoice issued by the service provider Receipt of payment or benefit is received by service provider  
8 Invoice issued by the service provider Receipt of payment or benefit is received by service provider Invoice issued by the service provider  
Service completed on or before 30-06-2011 9 Issue of Invoice Receipt of payment Issue of invoice or date of receipt of payment