Punjab Government offers option to file either old VAT 15 or new one

Chandigarh, July 25, 2014:  The Punjab Government has offered an option to the dealers of the state to file either the old Vat 15 or the new one in case they intend to exercise this opportunity they can do so while filling their return. Further the last date for filling of returns has been extended from 31st July to 20th August.

According to an official spokesman of the Excise and Taxation department said that the decision to this effect was taken after reviewing the representations received from trade bodies, vide Public Notice dated 24.7.2014, which was available on the website of the Department,. Moreover, an option has also been given to reserve ITC as deemed fit. He said that after return filing period is over, the representatives of trade and industry will be invited and after taking their views into account, if any simplifications are required in the returns, the same shall be made.

Adding further he said that it had been found that a number of dealers were avoiding payment of VAT on the value added by them by creating bogus stocks. It was observed that on 31.3.2014, some dealers had stock of as high as 50% of their annual sales which is totally contrary to general trade practices. Department officials stated that as per current analysis about 90% of the total VAT collection was contributed by only 3000 dealers.

During the year 2013-14, there were 144758 dealers who paid NIL tax.  Another 27993 dealers paid less than Rs.10, 000 VAT.  It was noted that dealers would work out their tax liability before the end of the quarter and in order to nullify it, procure bills carrying Input Tax Credit (ITC) and in  many cases upon physical inspection it was observed, the stock were  non-existent. Since conducting physical inspections over a large number of dealers would have created a hue and cry and is against the State policy to eliminate Inspector Raj. Accordingly amendment was essential in the Punjab VAT Act approved by the Council of Ministers and then the Punjab Assembly. Consequently the Department introduced a system of self-declaration, wherein the dealer gives the value addition done by him during the quarter.   

The spokesperson of the Department said that representations were received from lawyers and trade associations for amendment u/s 13 of the Punjab Vat Act and worksheet thereof. The Department has carried a review and as a measure to address the concerns of the Trade and Commerce it has been decided to offer an option to the dealers to file either the old Vat 15 or the new one. In case they intend to exercise this opportunity they can do so while filling their return. Further the last date for filling of returns has been extended from 31st July to 20th August. The Department has also decided to hold meetings of the Trade and Associations to address their concerns during the 2nd quarter and drive a solution which is favorable to Trade and Commerce so that transparency is maintained and Inspector Raj is dispensed with. It was also decided that dealers need not give stock of each item but may give the tax slab-wise stock i.e. how much stock of 14.3% tax rate items and how much stock of 6.05% tax slab items was available with them.