GOVERNMENT OF ANDHRA PRADESH
COMMERCIAL TAXES DEPARTMENT
PROCEEDING OF THE
AUTHORITY FOR CLARIFICATION AND ADVANCE RULING
(Under Section 67 of APVAT Act, 2005)
Present : Sri G. Lakshmi Prasad, Additional Commissioner (Policy FAC)
Dr. Sri K.Raghavaiah, Joint Commissioner (DMU & All Acts)
Sri P. Satyanarayana Reddy, Joint Commissioner(Legal)
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CCT's Ref.No.A.R.Com/ 179 /2006 Dt: 12-11-2007
Ref:1) CCT'S Ref.No.PMT/P&L/A.R.COM/2005, Dt:13-4-2005.
2) CCT's Ref.No.A.R.Com/ 179 /2006 Dt: 08.02.2007
3) Hon'ble STAT Order in Appeal No. 325/2007 dt. 23.8.07
O R D E R:
M/s. Sree Rayalaseema Alkalies and Allied Chemicals Limited, Kurnool (TIN No.28960200435) have filed an application and sought clarification and Advance Ruling under Section 67 of the APVAT Act, 2005 read with Rule 66(2)(i) of APVAT Rules,2005 along with the application fee of Rs.1000/-. The application is examined and found in order. Hence admitted and the Ruling was given vide reference 2nd cited supra.
Aggrieved on the clarification issued by this authority vide reference 2nd cited, they preferred an appeal before the STAT in T.A.No.325/2007. The Hon'ble STAT in their order dt. 23.8.2007 held that the appeal of the applicant was allowed and requested to issue clarification on the issues sought for within two (2) months of the receipt of the STAT's order.
Consequently a notice was issued to the applicant requesting them to appear before this authority for hearings on 4.10.2007.,Accordingly Mr. A.C.Gangaiah C.A. authorized representative of the applicant, appeared before this authority and explained the case.
The applicant's representative raised the following points for clarification and advance ruling.
1) They requested to clarify whether the deferment of tax should be on 'monthly basis' or 'yearly basis' as a specific reference to the period is absent in the relevant Act and Rules.
2) They also requested to clarify on the value of goods involved in the branch transfers while calculating for restriction of input tax credit as provided under Rule 20.
The issues raised by the applicant are examined with reference to the Act and Rules of APVAT Act, and the ruling is given as below:
1) Sub-rule (3) pf Rule 67 of the AP VAT Act, 2005- Rules, prescribes that, the tax payable on the tax to be claimed as deferment for each period shall be the net tax ( i.e. Out put tax less Input tax) and it shall be debited to eligibility amount of deferment.
Sub-Section (36) of Sec. 2 of the AP VAT Act 2005, defines, " tax period" means a calendar month or any other period as may be prescribed . Therefore, in the absence of any notification regarding any other period prescribed, it is hereby clarified that tax period means a calendar month. Therefore, any VAT dealer who is availing deferment shall file a declaration in Form VAT 502 for every tax period i.e. every month in addition to the return in Form VAT 200.
2) Sub-Rule (8) of Rule 20 of the AP VAT Rules prescribes that if a VAT dealer is making sales of taxable goods and also exempt transactions of taxable goods in a tax period, for the purchases of goods taxable @ 12.5%, the tax to the extent of 8.5% portion can be fully claimed in the same tax period , by applying a formula and also the purchases of goods taxable @ 4% and for the 4% tax portion in respect of goods taxable @ 12.5%, a formula A X B/ C shall be applied for each tax period. The Input tax credit can be claimed for each tax
period i.e. every month while furnishing an additional return in VAT200A for each month besides the return in Form VAT 200.
If the adjustment of Input tax credit is for a period of 12 months ending March, every year a return in Form VAT 200 B shall be filed. For the purpose of the Rule the word "C" of sub-rule (8) of Rule 20 denotes the total turnover, which includes value of exempt transactions. For the purpose of calculating the eligible Input tax credit in Form VAT 200A for every tax period, the value of exempt transactions is the assessable value as prescribed in the Central Excise Act, when the such goods are removed from the bonded warehouse, and transferred to the branches or agents outside the state ' for sale'.
Note :- An appeal against this proceedings can be filed before the Sales Tax Appellate Tribunal, A.P. Hyderabad within 30 days of this ruling.
Addl/Jt.Commissioner