In order to expedite the recovery of outstanding dues, a new scheme for settlement of arrears have been announced under the name and style of Tamil Nadu Sales Tax (Settlement of Arrears)

Consequent to the collition Government that emerged due to hung Parliament at the last general election, the Chancellor indicated the collition policy unveiling through its budget. One of the object stated by the Government was to bring the current structure deficit into balance by 2012. After announcing the same, a new office for budget responsibility was created. One of the highlights touching the Indirect taxes is to increase the rate of VAT to 20% from 4th January, 2011 from the present rate of 17.5%.

It is also proposed that in case the Assessee in business desire to claim the input VAT on fuel which hold some degree of personal output use of vehicle, will have to account for Output VAT on a scale charged from the quarter 1st May, 2010 at the standard rate revised to 20% from 4th January, 2011.

By a circular dated 7th May, 2010 the Commissioner of Commercial Taxes, A.P. clarified the correct view in regard to the qualification for exemption u/s 6 (2) of the CST Act as transit sale. He also mentioned in the circular that the sale occasioning the movement of the goods in pursuant to an existing contract, was equally applicable to the second and subsequent sale also. Therefore sales in transit to a predetermined or preidentified buyer do not in any way alter the interState nature of the transaction and therefore all the second and subsequent interState sales were eligible for exemption under the said section 6 (2) irrespective of the fact whether the sale was made to a predetermined buyer or not. The Commissioner in that regard observed that the earlier views carried by the Vigilance and Enforcement Department that a second and subsequent interState sale were not eligible for exemption on the ground that such sales were made to a predetermined buyer was not legally valid and hence not correct.

Cir.No.CCT’S Ref.A III (2) 91/2010 dated 07/05/2010 forwarded by Shri K.H. Rao, Advocate from Hyderabad.

NEWS FROM KERALA

The Commissioner of Commercial Taxes seems to have tightened the screw on the documentations prepared by the Builders, apparently showing that the transaction related to the sale of immoveable property with corresponding undivided share in the land sales in the commercial areas. The Commissioner directed all the Assessing authorities to go behind the Agreements of such cases and if required, take immediate action to assess such transactions including penal action for filing incorrect returns.

1. By a Notification No.1 of 2010 dated 11.3.2010, the Central Government amended the Central Sales Tax (Registration and Turnover) Rules’ 57 by inserting "in the telecommunication network" in the alteratives mentioned in Rule 13 for availability of the goods by issue of declaration in Form ‘C’.

2. Appointed day for sec.18(A)(2) of CST Act.

By Notification No.G.S.R.455(E) dated 28TH May, 2010 the Central Government notified 1st June, 2010 to be the appointed day for the purpose of sub-section 2 of Sec.18 amended by Finance Act, 2010.