In exercise of the powers conferred by section 57 of the Kerala General Sales Tax Act, 1963 (15 of 1963), the Government of Kerala hereby make the following rules, further to amend the Kerala General Sales Tax Rules, 1963.
1. Short title and commencement
(1) These Rules may be called the Kerala General Sales Tax (Amendment) Rules, 2006.
(2). They shall come into force at once.
2. Amendment of the Rules-
In the Kerala General Sales Tax Rules 1963,
(1). in Rule 3,
(a) after clause (b), the following clause shall be inserted, namely:-
"(ba) "Audit officer" means an officer not below the rank of a commercial Tax Officer appointed under section 3 who has been authorised by the Commissioner to perform the functions of an Audit Officer under the Act and includes an officer designated under section 18 to conduct audit visit."
(b) clause (bbb) shall be re-numbered as clause (bc) and after clause (bc) as so re-numbered, the following clauses shall be inserted namely:-
"(bd) "digital signature" means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3 of the Information Technology Act, 2000;
(be) "digital signature certificate" means a digital signature certificate issued under sub-section (4) of section 35 of the Information Technology Act, 2000;
(bf) "electronic record" means data, record or data generated, image or sound stored, received or sent in an electronic form or micro film or computer generated micro fiche";
(c) after clause (e) the following clause shall be inserted, namely:-
"(ea) "Key pair" in an asymmetric crypto system, means a private key and its mathematically related public key, which are so related that the public key can verify a digital signature created by the private key";
(d) clause (gg) shall be re-numbered as clause (gc) and before clause (gc) as so re-numbered, the following clauses shall be inserted, namely:-
"(ga) "Private key" means the key of a key pair used to create a digital signature;
(gb) "Public key" means the key of a key pair used to verify a digital signature and listed in the digital signature certificate";
(e) after clause (h), the following clause shall be inserted, namely:-
"(ha) "Return period" means and includes a calendar month or any other period during an year for which a dealer is required to submit return under these rules"
(2). In rule 18, after sub-rule (5) the following proviso shall be inserted at the end, namely :-
"Provided that no assessment under sub-rules (4) or sub-rule (5) shall be made where the returns filed under Rule 21 are deemed to have been accepted under section 17A and the assessments are deemed to have been completed under Rule 21A."
(3). Rule 19 shall be omitted.
(4). In Rule 21-
(a) in sub-rule (7A), after the words "fifteen lakh rupees" the words "not being a dealer paying tax under section 7" shall be inserted:
(b) in sub-rule (7AA), clauses (b), (d), (e), (f), (h) and (i) shall be omitted;
(c) sub-rule (7C), shall be omitted;
(d) sub-rule (7CC) shall be omitted;
(e) sub-rule (7D) shall be omitted;
(f) in sub-rule (8), after the words, "The return(s) so submitted" the words figures and letters "other than those to which the provisions of section 17A applies", shall be inserted;
(g) in sub-rule (9), after the words, "If the return(s) submitted", the words figures and letters "other than those to which the provisions of section 17A applies" shall be inserted,
(5) After Rule 21A, the following rules shall be inserted, namely: -
"21B. Self assessment.-
(1) Where the return submitted under sub-section (1) of section 17 by any dealer to whom the provisions of section 17A applies is in the prescribed manner and accompanied by the documents prescribed under Rule, 21(7AA), the assessing authority shall, on or before the due date for filing of the return for the next return period, issue an acknowledgement -
(a) where the return is submitted in person, by affixing his signature and seal in the copy of the return; and
(b) in other cases, in Form No. 10
(2) Where the receipt of the return is acknowledged in the manner specified in sub-rule (1), the assessment relating to the return period shall, subject to the provisions of section 18,19, 19A, 19B and 19C be deemed to have been accepted under section 17A and the assessment for the return period shall be deemed to have been completed.
(3) Where assessment is deemed to have been completed under sub-rule (2), the assessing authority shall not be required to give any further intimation to the dealer.
21C. Assessment in case of non-filing of return and filing of defective return. -
(1) Where the return submitted under sub-section (1) of section 17 by any dealer specified under Rule 21B is not in the prescribed manner or not accompanied by the prescribed documents or where the details furnished in the return are incorrect, the assessing authority shall, after recording its reasons, reject the return.
(2) Where a return is rejected under sub-rule (1) the assessing authority shall issue a notice to the dealer in Form No. 11 on or before the due date for the filing of the return for the next return Period.
(3) A dealer whose return is rejected under sub-rule (1) may, file a fresh return, curing the defects, within ten days after the receipt of the notice specified in sub-rule (2) and accompanied by such documents as provided under sub-rule (1) of Rule 21B together with proof of payment of interest on the tax payable at the rates provided under sub-section (3) of section 23 for the period from the due date of filing of return till the date of filing of such fresh return. The assessing authority, shall acknowledge the receipt of the return in the manner specified under sub-rule (1) of Rule 21B. Thereupon, the return shall be deemed to have been accepted and the assessment for the return period shall, subject to the provisions of sections 18,19,19A, 19B and 19C be deemed to have been completed.
(4) If any dealer fails to submit any return as provided under sub-section (1) of section 17 or files incorrect return and fails to file a fresh return as provided under sub-rule (3), the assessing authority shall estimate the turnover for the return period and complete the assessment to the best of its judgment.
(5) No assessment under sub-rule (4) shall be completed without affording the dealer an opportunity of being heard.
(6) On receipt of the notice under sub-rule (5), if the dealer files a return for the return period as provided under sub-section (1) of section 17 and accompanied by proof of payment of tax payable and interest on this amount from the due date for filing of return till the date of filing of return at the rates specified in sub-section (3) of section 23 and double the amount of interest so due as penalty, the assessing authority shall drop the proposal for assessment under sub-section (3) the return shall, subject to the provisions of section 18,19,19A,19B and 19C, be deemed to have been accepted under section 17A and the assessment for the return period shall be deemed to have been completed as and when the assessing authority acknowledges the receipt of the return in the manner specified under sub-rule (1) of Rule 21B.
21D. Visit to dealer's premises and audit of accounts and other records by audit officers. -
(1) The officer designated under sub-section (1) of section 18 may, by an order in writing, authorize not less than two audit officers to visit the place of business of any dealer and audit any returns, books of accounts, any other records, stock statements and goods relating to any return period.
(2) The authorization shall be in Form No. 18 and the audit officer authorised shall issue a notice to the dealer concerned in Form No. 18A for conducting an audit visit on a date which shall not be within fifteen days from the date of the notice.
(3) The audit officer authorized in this behalf may, with due intimation to the dealer, enter any place of business and require the dealer, his employee or any other person found there assisting the dealer in carrying on business to make available all or any of the books of accounts or other records relating to any return period for audit and require them to prove the correctness of the stock statement and goods and thereupon the dealer or his representative shall render necessary facilities to the audit officers to conduct the audit.
(4) The audit officers may inspect and verify all or any of the books of accounts and other records relating to any return period and require the dealer to furnish any information or statement relating to the business, which he may deem necessary for checking the credibility or correctness of the returns.
(5) On completion of the audit visit, the officer mentioned in sub-rule (1) shall issue a certificate of audit in form No. 19 to the dealer.
(6) Any audit visit under section 18 during a period of one year from the date on which this rule takes effect shall be done only under the directions of the Commissioner.
(7) The Audit officer authorized under sub-rule (1) shall submit a report to the designated officer on the audit conducted at the business place of the dealer and the designated officer shall take appropriate decision whether to proceed under sub- section (2) of section 18.
(8) Notwithstanding that a certificate has been issued under sub-rule (5), if the designated officer considers that any further information is required, he may direct the dealer to furnish the required information or direct the audit officers to obtain the required information.
21E. Audit Assessment :-
(1) Where on consideration of the report submitted by the Audit Officer under sub-rule (7) of Rule 21D the designated officer deems it necessary to proceed under sub-section (2), of section 18 he may authorise the audit officer or any other officer to proceed to reject the return submitted by the dealer and complete the assessment to the best of his judgment in accordance with these rules.
(2) Where the officer authorised under sub-rule (1) considers it necessary that a further verification of the accounts or other records is necessary, he shall serve upon the dealer a summons in Form No 50 specifying therein the details of the records to be made available, the date on which and the time and place at which the dealer has to make available the books of accounts or other records.
(3) On receipt of the summons in Form No. 50, the dealer or any other person assisting him in carrying on business, shall make available the books of accounts and other records, stock statements and goods as specified in the notice.
(4) (i) Where in an audit, any irregularity as specified under sub-section (2) of section 18 is detected and such irregularity relates to one return period only and does not disclose any pattern of suppression, the best judgment assessment shall be limited to the return period to which the irregularity relates.
(ii) Where the irregularity detected is the failure to prove the claim of any exemption or reduction in rate of tax, the best judgment assessment shall be limited to the disallowance of the claim of such exemption or reduction, as the case may be. Where any such claim of exemption or reduction in rate of tax is disallowed, in addition to the tax that becomes additionally payable, interest under sub-section (3) of section 23 and twice the interest as penalty shall be demanded or levied.
(iii) Where the irregularity relates to suppression of taxable turnover and a pattern of suppression is clearly made out, the best judgment assessment shall be in respect of all the return periods to which the pattern is applicable.
(iv) Where the best judgment assessment is done after the expiry of the year in which the relevant return periods fall, and the best judgment relates to more than one return period, the assessment shall be made by a single order. However assessment relating to return periods falling under different years shall not be made by a single order.
(v) The assessing authority making the best judgment assessment shall serve on the dealer a notice clearly specifying the irregularities or defects noticed and the manner in which the best judgment assessment is proposed to be completed. Where a pattern of suppression is detected, the pattern and the relation borne by such pattern of suppression to the estimate proposed shall be clearly made out in the notice.
(6). For Rule 22A the following rule shall be substituted namely :-
22A. Mode of submission of returns :-
(1) Where any return or statement is required to be filed under these rules, any person filing such return or statement may render or make available the same in the required form which may be written, typewritten, printed or in electronic form. Where such return or statement is rendered or made available in an electronic form it shall be accessible so as to be usable for a subsequent reference and shall be authenticated by the secure digital signature of the person signing the return or statement, as the case may be, and the public key is made available to the authority before whom the document is filed. Every dealer, other than a dealer to whom an electronic identity card is issued, who desires to file return through electronic means shall pay an annual fee of two hundred rupees which shall be paid to the assessing authority in the same manner as a registration fee payable under the Act is paid.
(2) Any return under these rules may be submitted either in person, or by registered post with acknowledgement due, or by courier service, or through electronic means.
(3) If the return is submitted in person, the officer receiving the return shall acknowledge the receipt of the same by affixing his dated signature with seal on the duplicate copy of such return. If the return is submitted through electronic means the officer receiving the return shall send an acknowledgement in Form No. 10J. If the return is submitted by any other means the acknowledgement shall be in Form No 10 K.
(4) If the return is submitted in electronic form, the officer receiving such return shall not acknowledge the receipt of the same unless he is satisfied that it contains all the required information and the same is not a read only copy and the details contained in it are transferable to another computer and is duly signed by the dealer.
(5) Any acknowledgement under sub-rule (3) or sub-rule (4) in relation to a return period shall be issued not later than the due date for the filing of the return for the subsequent return period."
(7). Rule 28 shall be omitted.
(8). For Rule 28A the following Rule shall be substituted, namely:-
"28A. Declaration in respect of sales deemed to be in the course of export under Section 5(3) of the Central Sales Tax Act, 1956. -
(1) A dealer who purchases goods from another dealer in circumstances in which the sale to him is to be deemed to be in the course of export under subsection (3) of Section 5 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) shall furnish to the selling dealer the original and duplicate portions of the "declaration in form H prescribed under the Central Sales Tax (Registration and turnover) Rules, 1957, duly filled in and signed by him or by any responsible person duly authorized by him in this behalf and shall retain the counterfoil.
(2) A dealer who claims that a sale is to be deemed to be in the course of export under sub-section (3) of Section 5 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), shall attach to his return of turnover for the return period, in Form No. 10, the original portion of the declaration in Form H prescribed under the Central Sales Tax (Registration and turnover) Rules, 1957 received by him from the purchasing dealer. He shall produce the duplicate portion of it marked for inspection, if the assessing authority directs him to do so.
(3) The supply, use, custody, maintenance of account and validity of the declaration in Form H shall be in accordance with the provisions of Rule 11D of the Central Sales Tax (Kerala) Rules, 1957."
(9). For Rule 30 the following rule shall be substituted, namely:-
"30. Payment of tax at compounded rates :-
(1) Every dealer eligible to pay turnover tax at compounded rate under section 7, who desires to exercise the option provided for under the said section may apply to the assessing authority concerned for permission to pay turnover tax at the rates specified therein in Form no. 21 on or before the 30th day of April, of the year to which the option relates or along with the application for registration under the Act, whichever is later.
Provided that the assessing authority may admit an application filed after the prescribed date for good and sufficient reasons to be recorded in writing.
Provided further that the application relating to the year 2005-06 shall be filed within fifteen days from the date on which the Kerala General Sales Tax (Amendment) Rules, 2005 is published.
(2) (i) If the assessing authority is satisfied that the application filed is in order, it shall grant the permission in Form No. 22
(ii) If the application filed is not in order, the assessing authority shall reject the application, for reasons to be recorded in writing, after giving the dealer an opportunity of being heard.
(iii) The dealer to whom permission is granted under sub-rule (2) shall submit along with the monthly return in Form No. 9 a statement of purchases of liquor made during the month, showing invoice number and date, particulars of goods, quantity and value, along with photocopies of the purchase bill/invoices.
(10). Rule 30A shall be omitted.
(11). In Rule 32 sub-rules (13A), (13B), (13C), (14), (14A), (14AA), (14C) and (15A) shall be omitted.
(12). Rule 59A shall be omitted.
(13). Form No. 9 the following forms shall be inserted, namely: -
"KERALA GENERAL SALES TAX RULES, 1963
Form No. 10
Acknowledgment for receipt of return
(See Rule 21 B(I))
The undersigned hereby acknowledges the receipt of the return in Form No. 9 furnished by you for the period .................. (specify month/quarter)
KERALA GENERAL SALES TAX RULES, 1963
Form No. 11
Defect Notice
(See Rule 21C(2))
Sir/Gentleman,
On verifying the return filed by you in Form No. 9 for the month/quarter ended............ it is found that the return is defective for the following reasons.
(Mention the defects)
The return is therefore rejected.
You may, however, file a fresh return in accordance with sub-rule (3) of Rule 21C
(14). For Form Nos. 18, 18 A, 19 and 19A the following forms shall be substituted, namely:
Form No. 18
Authorisation
(for Audit Visit under section 18)
(See Rule 21D(2))
To
...........................
(Officer to whom issued)
Whereas on consideration of information placed before me I am satisfied that an audit is to be conducted at the following business place(s) (here specify the details of business places for audit).
.................................................................................................................................
..................................................................................................................................
You are hereby authorized to audit any returns, books of accounts, any other records or stock statements and goods relating to the return period.................. within ......... days of the receipt of this intimation. The report on the execution of audit should reach the undersigned within ............ days of the completion of audit authorized.
FORM No. 18A
NOTICE
[ FOR AUDIT VISIT UNDER SECTION 18]
(See Rule 21D (2)
M/S ............................
Whereas your place of business has been selected for audit under Sec. 18 of the Kerala General Sales Tax Act, 1963, it has become necessary to verify your returns, books of accounts, any other records, stock statements and goods relating to the return period ............, it is proposed to visit the following places of business at ...... a.m. / p.m. on ......................................................
You are therefore directed to render all necessary facilities for conducting audit or to cause rendering such facilities through any competent person authorized by you in the event of your absence with reasonable cause. Any statement given or any act done by such person on your behalf shall be fully binding on you.
Failure on your part to comply with the directions aforementioned would make you liable for best judgment assessment besides penal action / prosecution.
FORM No. 19
CERTIFICATE OF AUDIT
[See Rule 21D(5)]
This is to intimate Shri/Smt./Messrs...... that your place of business has been visited and the following books of accounts and connected records for the period.................. have been audited on............
................................................
(Specify the particulars of accounts and records audited).
MENTION DEFECTS/IRREGULARITIES NOTICED
(16). For form No. 21 the following form shall be inserted, namely:-
Form No. 21
(Application for permission to pay tax under section 7)
(See Rule 30)
I /We..................... do hereby declare that the details furnished above are true and correct and I/We am/are eligible to pay turnover tax at compounded rate under section 7 of the Kerala General Sales Tax Act, 1963. I agree to abide by the terms and conditions stipulated under section 7 and Rule 30.
(17). Form Nos. 21B, 21BA, 21BC, 21C, 21CA and 21CB, 21D and 21DD shall be omitted.
(18). For Form No.22, the following form shall be substituted, namely, -
" KERALA GENERAL SALES TAX RULES, 1963
Form No. 22
(Permission for payment of tax under section 7)
Whereas .................. holding registration certificate No ............... dated ............... has proved to my satisfaction that he/they is/are eligible for payment of tax under section 7, permission is hereby granted to the said dealer to pay tax under the said section subject to the conditions laid down in the said section and also in Rule 30.
The permission is valid from ............... to...............
(19). Form Nos. 25, 25A, 25B, 25C, 25D, 25E 46A and 50AA shall be omitted.
Explanatory Note
(This does not form part of the notification but is intended to indicate its general purport)
As per the Kerala General Sales Tax (Amendment) Act, 2005 certain amendments were made to the Kerala General Sales Tax Act, 1963. Section 7 was inserted to provide a facility for payment of tax at compounded rates. Section 17A was substituted by a provisions for self-assessment. Section 18 was also substituted by a provision empowering the officers to conduct visit to dealers premises and audit of accounts and other records. Consequent to this appropriate amendments are to be made in the Kerala General Sales Tax Rules,1963,published as S.R.O.No.331/1963 in the Kerala Gazette Extraordinary No. 69 dt.30.3.1963.
To carry out the above purposes Government have decided to make necessary amendments in the Kerala General Sales Tax Rules, 1963.
This notification is intended to achieve the above object.