The Hon’ble Chief Minister of the State of Rajasthan presented the State Budget for the year 2010-11 on 9th March, 2010. Based on the Budget Speech and notifications, there are the following changes :

1. Under Rvat Act

i. The battery driven motor vehicles, Solar Energy Equipments, Mehandi, Cones, Beehive, Bee Colony, Bee Box and Rudrax exempted from VAT.

ii. Items mentioned in Schedule IV including Parts ‘A’ & ‘B’ are taxable @ 5% instead of 4% except goods of special importance in inter-State trade or commerce (declared goods) i.e. Oil Seeds, Iron & Steel, Crude Oil, Cotton, Coal, Cereals, etc.

iii. The time limit of tax liability @ 1% on all kinds of Pulses has been extended up to 31.03.2011.

iv. The following goods are taxable @ 14% instead of 4% :

(a) PVC Cables for Voltage exceeding 1000 Volt;
(b) Lime Stone;
(c) Branded Readymade Garments;
(d) Multi function Devices;
(e) U Foam;
(f) Those chemicals not specified in Schedule IV;
(g) Electrodes;
(h) Bitumen;
(i) Coal Tar;
(j) All kinds of D. G. Sets and Inverters;
(k) All equipments for communication such as PBX, EPBX and components and parts;
(l) Automobile bodies.

v. In Schedule IV following new items have been specified and are taxable @ 5%:

i. Cotton Seed Oil Cake;
ii. Crow Bar;
iii. Water Tankers for supply of water;
iv. CFL Bulbs;
v. Marble Powder, Kareji and Chips;
vi. Flour Mill with Motor Capacity more than 2 HP.
vii. Wood of Safeda and Arusa
vi. Food served in Hotels and Restaurants below 3 Star category, is now taxable @ 5% instead of 14%.
vii. Rough Kota Stone is now taxable @ 5%. Earlier it was taxable on the basis of weight.
viii. The Composition Fee u/s 3(2) of the RVAT Act has been increased from 0.25% to 0.50%.
ix. The following items have been deleted from the requirement of VAT-47 form :
i. Gur;
ii. Match Box;
iii. Articles made of cement;
iv. Crackers;
v. Non-edible oil;
vi. Cotton Seed;
vii. Audio & Video Cassettes;
viii. Photography goods.
x. For compulsory registration the annual turnover threshold limit raised from Rs. 5 lakhs to Rs. 10 lakhs.
xi. First appeal filed by dealers to be disposed off compulsorily within one year.
xii. Now the dealers will have to deposit upto 10% of disputed tax (excluding penalty and interest) only before filing first appeal
xiii. Date for filing of Audit Report extended from 31st December to 31st January.
xiv. Self assessment made applicable for dealers filing Annual Return or Audit Report in time even if Quarterly Returns were delayed.

2. Works Contract Tax

i. The time limit for filing the application for obtaining the exemption has been increased from 1 year to 2 years on the condition of payment of penalty of Rs. 5,000/- for the second year.

ii. A new slab for E.C. Fee has been introduced where the value of material involved in Works Contract is less than 5%
of the contract, the rate of exemption fee is 0.25%.

3. Amendment in VAT Rules

i. Rule 19(i) has been amended. According to the amendment those dealers whose net tax liability was upto Rs. 20,000/- in the immediately preceding year shall be exempt from filing the Quarterly Return, and shall file Annual Return

ii. Following dealers have been exempted from filing the Annual Return i.e. form 10-A :

(i) who has opted for quarter assessment under sub-section (2) of Sec. 23 of the Act; or

(ii) who has opted for payment of tax under sub-section (2) of section 3 or section 5 or under a notification issued under
sub-section (3) of section 8 of the Act;

or

(iii) who has filed Audit Report under sub-section (1) of Sec. 73 of the Act

iii. As per amendment in Rule 19(iii) only the following documents will accompany the Quarterly Return i.e. Form VAT-10 :

(a) Treasury Receipt (Bank Challan);

(b) Statement of purchases in Form VAT 07-A.

(c) Statement of Sales in Form VAT 08-A.

iv. Those dealers who have filed VAT Audit Report or Annual Return i.e. Form VAT 10-A are exempt from filing the Trading A/c, P & L A/c and Manufacturing A/c.

v. Rule 19A has been amended and those dealers who are filing their Return electronically, the time limit for submitting the Return in Form VAT 10 has been increased to 45 days (from 30 days) from the end of the Quarter and for filing VAT 11 the time limit has been increased to 105 days from the end of the year.

vi. Rule 27A amended. In case of granting the return of Input Tax Credit, now the dealer is required to submit the bank guarantee of the equivalent amount of provisional refund for a period of 3 years along with an undertaking. In such cases the refund of ITC will be granted within 30 days.

vii. New Rules 40A introduced. The Central Govt., State Govt. departments/ bodies, Panchayat etc. will make the payment of net VAT directly in the bank and issue the Form VAT 41-A to the seller.

viii. New Rule 45-A inserted. If there is any ITC demand pending due to verification of the Input, the Assessing Authority shall not enforce the dealer for recovery of demand.