MADHYA PRADESH ACT
No. 8 of 2007
The Madhya Pradesh VAT (Amendment) Act, 2007
[Received the assent of the Governor on the 31st March, 2007; assent first published in the "Madhya Pradesh Gazette (Extra-ordinary)" dated the 1st April, 2007]
An Act further to amend Madhya Pradesh VAT Act, 2002.
Be it enacted by the Madhya Pradesh Legislature in the Fifty-Eighth year of the Republic of India as follows :
1. Short title and commencement
(1) This Act may be called the Madhya Pradesh VAT (Amendment) Act, 2007.
(2) (a) The provisions of Section 14(i)(b), and 14(ii)(b), relating to 'Drugs and medicines' of this amending Act shall be deemed to have come into force from 8.8.2006 subject to the condition that if the rate of tax prevailing before the date of publication of this Act in the Gazette was higher and the amount of tax collected at such higher rate from 8th August, 2006 to the date of publication of this Act in the Gazette,-
(i) has been deposited in the treasury, such amount shall not be refunded; and / or
(ii) has not been deposited in the treasury, such amount shall have to be deposited in the treasury; and
(b) the remaining provisions of this amending Act shall come into force on such date as the State Government may, by notification, appoint.
2. Amendment of Section 7
After clause (b) of sub-section (1) of Section 7 of the Madhya Pradesh VAT Act, 2002 (No. 20 of 2002) (hereinafter referred to as the Principal Act), the following clause shall be inserted namely,-
"(c) If the sub-contractor proves in the prescribed manner to the satisfaction of the Commissioner that the contractor has opted for composition under Section 11-A in respect of the works contract being executed by the sub-contractor, the sub-contractor shall not be liable to pay tax on the turnover of the goods supplied in the execution of the works contract."
3. Amendment of Section 9
Section 9 of the Principal Act shall be renumbered as sub-section (1) thereof and after sub-section (1) as so renumbered, the following new sub-section shall be added, namely :
"(2) Notwithstanding anything contained in this Act, no tax shall be levied on goods specified in Schedule II, if the goods are sold by any one of the public sector oil companies, that is Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and Indo-Burma Petroleum Company Limited to any one of the said oil companies."
4. Insertion of Section 11-B
After Section 11-A of the Principal Act, the following section shall be inserted, namely,-
"11-B : Payment of lump sum in lieu of tax
(1) Notwithstanding anything contained in this Act, the State Government may direct payment of tax in lump sum in respect of such class of goods by such class of dealers on such terms and conditions as may be notified in the official Gazette.
(2) The tax in lump sum specified in sub-section (1) shall not exceed the amount of maximum tax liability provided in sub-section (1) of Section 9."
5. Amendment of Section 18
In Section 18 of the Principal Act, in sub-section (4),-
(i) in clause (a),-
(a) for sub-clause (iii), the following sub-clauses shall be substituted, namely,-
"(iii) fails to furnish return; or
(iv) has furnished return or returns and the tax paid along with the return or returns is less than the tax as per accounts."
(b) in second sub-division, for item (3), the following items shall be substituted, namely,-
"(3) the tax payable for the period for which he has failed to furnish return; or
(4) the amount of tax by which tax so paid along with the return or returns falls short of the tax as per accounts."
(ii) for clause (b), the following clause shall be substituted, namely,-
"(b) If a registered dealer having furnished a return under sub-section (1) or a revised return under sub-section (2) for any period and paid the tax payable according to such return or revised return after the time prescribed therefor or the tax paid along with the return or returns falls short of the tax as per accounts, fails to pay interest along with such return or revised return or payment of amount of tax by which tax so paid along with the return or returns falls short of the tax as per accounts, in accordance with the provisions of clause (a), the Commissioner shall levy the interest liable to be paid by the dealer and after giving the dealer a reasonable opportunity of being heard, may direct him to pay in addition to the tax payable or paid and the interest payable by him, by way of penalty, a sum equal to such rate as may be prescribed which shall not exceed 1.5 percent per month of the amount of interest, from the date such interest had become due to the date of its payment or to the date of order of assessment, whichever is earlier."
6. Amendment of Section 26
In Section 26 of the Principle Act,-
(i) for proviso to sub-section (2), the following proviso shall be substituted, namely,-
"Provided that if the value of labour involved in the contract is more than fifty percent of the contract value and the contractor has not opted for composition under Section 11-A, the deduction towards the tax payable shall be made at the rate of one percent :
Provided further that no deduction shall be made in respect of any sale or purchase taking place outside the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of import of goods into the territory of India :
Provided also that no deduction shall be made from any payment made to any sub-contractor by a contractor where the contractor has opted for composition under Section 11-A."
(ii) in sub-section (3), for the words 'in the prescribed form' the words 'in the prescribed form which is obtained in the prescribed manner' shall be substituted.
7. Insertion of new Section 27
After Section 26 of the Principal Act, the following new section shall be inserted, namely,-
"27. Person responsible for deduction of tax at source
Notwithstanding anything contained in Section 26, no deduction or deduction at lower rate at source towards tax payable shall be made under the provisions of the said section from any consideration payable to a dealer or person, if such dealer or person furnishes to the person responsible for paying any amount in respect of the sale or supply or contract referred to in the said section, a certificate in writing, in such form, issued in such manner and by such authority as may be prescribed."
8. Amendment of Section 29
In Section 29 of the Principal Act,-
(i) in the marginal heading for the word 'amalgamation', the words 'amalgamation or de-merger' shall be substituted;
(ii) after sub-section (5), the following sub-sections shall be inserted, namely,-
(5A)(a) When any company is de-merged by the order of a Court or of the Central Government and the order is to take effect from a date earlier to the date of the order, then for all of the purposes of this Act, it shall be presumed that the two or more companies brought into existence by the operation of the said order have not sold or purchased any goods to or from each other during the period commencing on the date from which the order is to take effect and ending on the date of the order and will be assessed to tax accordingly.
(b) Notwithstanding anything contained in the order specified in clause (a), for all of the purposes of this Act, the said two or more companies will be treated as single company for the periods up to the date of the said order and the registration certificate of the de-merged company will be cancelled where necessary, with effect from the date of the said order and the said two or more companies shall be granted registration certificates, where necessary, from the date of the said order.
(5B) Notwithstanding anything contained in Section 14, when the ownership of the business of a registered dealer is entirely transferred or when two or more companies are amalgamated or a company is de-merged by the order of a Court or of the Central Government, then the transferee, the amalgamated company or the de-merged companies shall be entitled to take credit of input tax rebate, which remains unadjusted on the date of said transfer or the order of amalgamation or de-merger, as the case may be.
(iii) in sub-section (6) for the brackets, figures and word "(4) and (5)", the brackets, figures, letters and word "(4), (5), (5A) and (5B)" shall be substituted.
9. Amendment of Section 46
In Section 46 of the Principal Act,-
(i) in sub-section (5), for the words "thereupon the Appellate Authority shall stay the recovery of the balance of tax and/or penalty till the decision of appeal", the words "on an application by the dealer for stay of the recovery of the balance of tax and/or penalty, the Appellate Authority may stay the recovery of the balance till the decision of appeal" shall be substituted;
(ii) in sub-section (6), for the words "thereupon the Appellate Board shall stay the recovery of the balance amount till the decision of appeal", the words "on an application by the dealer for stay of the recovery of the balance amount, the Appellate Board may stay the recovery of the balance amount till the decision of appeal" shall be substituted;
(iii) for sub-section (7), the following sub-section shall be substituted, namely :
"(7) Every first appeal shall be filed within thirty days and every second appeal shall be filed within sixty days from the date of communication of the order against which the appeal is to be filed."
(iv) in sub-section (8), in clause (a), for the words 'one calendar year', the words 'twelve months' shall be substituted;
(v) after sub-section (8), the following sub-section shall be inserted namely,-
"(8A) The appeals pending before the Appellate Authority on the date of commencement of the Madhya Pradesh VAT (Amendment) Act, 2007 shall be disposed of by the Appellate Authority within the period specified in the provisions in force before the date of such commencement or within the period of one [calendar year] following such commencement, whichever is earlier."
(vi) in sub-section (9), for the words 'one calendar year' the words 'twelve months' shall be substituted.
10. Amendment of Section 53
For sub-section (2) of Section 53 of the Principal Act, the following sub-section shall be substituted, namely,-
"(2) The Commissioner or a dealer, aggrieved by any order referred to in sub-section (1) passed by the Appellate Board, may file an appeal to the High Court and such appeal shall be filed within ninety days from the date of the communication to the dealer or the Commissioner of the order appealed against in the form of a memorandum of appeal precisely stating therein the substantial question of law involved."
11. Amendment of Section 57
In Section 57 of the Principal Act,-
(i) in sub-section (8), for the figures and words '3.5 times' and 3 times", the words 'ten times' and 'eight times' shall respectively be substituted;
(ii) in sub-section (17), for the word 'twice' the words 'five times' shall be substituted.
12. Amendment of Section 71
In sub-section (2) of Section 71 of the Principal Act,-
(i) after clause (e), the following clause shall be inserted, namely,-
"(ea) the manner in which the payment of tax by the sub-contractor under clause (b), and by the sub-contractor that the contractor has opted for composition under clause (c) of sub-section (1) of Section 7 shall be proved;"
(ii) in sub-clause (viii) of clause (l), for the words, bracket and figures "the form of certificate to be issued under sub-section (3) of Section 26", the words, bracket and figures "the form of certificate to be issued under sub-section (3) of Section 26 and the manner in which it is to be obtained," shall be substituted.
13. Amendment of Schedule I
In Schedule I to the Principal Act,-
(i) after serial number 23, the following serial number and entries relating thereto shall be inserted, namely,-
"23A Lac and shellac."
(ii) serial number 50 and entries relating thereto shall be omitted.
14. Amendment of Schedule II
In Schedule II to the Principal Act,-
(i) in Part II,-
(a) in serial number 8, after the word "betel nut", the bracket and words "(other than sweetened and/or scented betel nut)" shall be inserted;
(b) after serial number 19, the following serial number and entries relating thereto shall be inserted, namely,-
(c) for serial number 55 and entries relating thereto the following serial number and entries relating thereto shall be substituted, namely,-
(d) serial number 56 and entries relating thereto shall be omitted.
(e) serial number 87 and entries relating thereto shall be omitted.
(f) in column (2) against serial number 108, for the words "fruit juice", the words "fruit juice, thandai and sharbat" shall be substituted;
(g) in column (2) against serial number 110, for item number 28 the following item shall be substituted, namely,-
"28. Sattu, murmura and panjiri".
(ii) in Part III,-
(a) in column (3) against serial number 1, for the figures "28.75", the figure "26" shall be substituted;
(b) serial number 10 and entries relating thereto shall be omitted.