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Odisha VAT Amendment ACT 2015- a Summary

Value Added Tax - VAT and CST - By: - CA.Tarun Agarwalla - Dated:- 11-12-2015 Last Replied Date:- 15-12-2015 - The Government of Odisha Vide its notification no 9848-I-Legis 5/2015-L dated 24th September 2015 has notified THE ODISHA VALUE ADDED TAX (AMENDMENT) ACT, 2015, (Odisha Act 7 of 2015), an act to further amend THE ODISHA VALUE ADDED TAX, ACT 2004 . Further the Act has been assented by the honourable Governor of Odisha on 21st September 2015. The Department of Finance, Vide notification n .....

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om 40 Lakhs to 50 Lakhs, that is, any retailer whose annual gross turnover does not exceed 50 lakhs have an option to pay turnover tax in lieu of VAT. Section 3 (Amendment of Section 10) This section deals with the taxable limit where the dealer shall be liable to pay VAT if it exceeds the specified limit which has been enlisted below: Sl No. Dealer Who On/After 1.10.2015 Up to 30.9.2015 Purchases or receives any goods from outside the State a For sale within the State on his own behalf or on be .....

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to as the contractor) enters into further contract for assigning such works contract, either wholly or in part thereof to other dealer (hereinafter referred to as sub-contractor), directly or otherwise, and the sub-contractor executes such works contract then each or either of them shall be jointly and severally liable to pay tax, and notwithstanding anything contained in this Act, the contractor and the sub-contractor shall pay tax proportionately in the prescribed manner in respect of transfer .....

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r that the contractor has opted for composition under sub-section (3) of section11 in respect of the works contract being executed by the subcontractor, then the sub-contractor shall not be liable to pay tax on such turnover. Meaning if a dealer involved in the execution of works contract (contractor) outsources such work to another dealer i.e. sub-contracts it (sub contractor) either wholly or partially, directly or otherwise and if the said sub contractor executes the assigned work, then both .....

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for composition scheme in respect of the works contract being executed, then the sub-contractor shall not be liable to pay tax. Section 4 (Amendment of Section 11) Sub-section 3 of Section 11 of Odisha Value Added Tax Act is an over-riding section and provides for an option to pay taxes under composition scheme for works contractor. The said sub-section also widens its scope by including dealers undertaking the construction of flats, dwellings or buildings or premises and transferring them in p .....

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ises & transferring them in pursuance of an agreement along with the land or interest underlying the land Subject to fulfilment of certain conditions Subject to such conditions and restrictions as may be specified in the said notification including the provision for option of dealer for such scheme Section 5 (Amendment of Section 16) This section lays down the criteria fulfilling which a dealer can opt for the scheme of turnover tax in lieu of VAT. One such criteria being the gross turnover .....

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purchase of goods in excess of the amount of such tax actually paid under this Act. The amendment may warrant to such cases where the input tax credit can only be availed if the amount claimed is actually being paid in the invoice which is a base document for taking input tax credit. Meaning there by, the dealer needs to assure from the party from whom the goods have been purchased as to the VAT mentioned in the invoice is actually being paid. Alternatively as a preventive measure the dealer nee .....

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tration in the prescribed form, which shall specify the class or classes of goods dealt in or manufactured by him and such registration certificate shall be assigned a number in the manner as may be prescribed. The Act earlier required as a part of the registration process to conduct an inquiry before issuing the registration certificate. However with the electronic registration in place with an online application and document verification, such enquiry is no longer required. Section 8 (Amendmen .....

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ing contained in this Act, cancel the certificate of registration granted to him. Provided that, no such cancellation shall be made unless the dealer has been given a reasonable opportunity of being heard . Hence, the registering authority shall have the powers to demand for reasonable or additional security from the dealer for proper utilization of tax payable. In case, the said amount is not deposited by the dealer within the said time and manner then the registering authority shall have the p .....

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tomatically irrespective of the availability of the successor at the time of death. Clause (h) under sub-section 1 of section 31 has been inserted stating that the issuing authority can cancel the registration certificate on the basis of good or sufficient reasons . Sub-section 2 of section 31 expresses the point of time which renders the certificate of registration inoperative. This amendment is made by insertion of clause (c) to section 31(2) applicable to section 31(1) (g). Further clause (d) .....

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y of being heard before such cancellation. Section 11 (Amendment of Section 32) The sub-section (1) shall be substituted as follows: (a) Where the registered dealer: Sells or disposes of his business or any part thereof Or discontinues his business, Or changes the name, style, or nature of business, Or makes any addition or deletion in the class of goods dealt in or manufactured, Or changes his place of business (other than principal place of business) or warehouse, Or opens a new place of busin .....

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amendment. In respect of clause (c) the registering authority may issue a fresh registration certificate or reject the application for such amendment. However before any application is rejected the registration authority is required to give a reasonable opportunity of being heard. Sub-section (7) of the said section is the penalty section. If the dealer fails to make an application of the amendment within the prescribed time, he shall have to pay a penalty of ₹ 100 each day of default sub .....

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se of return filled electronically, signature by the dealer or authorized person is not required. Section 13 (Amendment of Section 39) Sub-section (5) of section 33 of the principal Act has been substituted to: If a registered dealer furnishes the return in respect of any tax period, it shall be deemed to be self-assessed. Section 14 (Amendment of Section 41) The Act earlier required that once the tax audit of the dealer, the authorized officer shall submit an 'Audit Visit Report' within .....

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e amount as penalty within 30 days of the date of service of the notice, there shall be no assessment on account of such audit. If the dealer does not comply and fails to make the payment the authorized officer shall submit the 'Audit Visit Report' to the assessing authority along with the statements recorded and documents obtained evidencing suppression of purchases or sales, or both, erroneous claims of deductions including input tax credit and evasion of tax, if any, relevant for the .....

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wn to an amount equal to that of the tax payable. Section 42 (6) talks about time period for completion of audit assessment which was prescribed as six months and commissioner may extend it to further period of six months. However after the 2015 amendment the same period can be extended to further six months. Hence after amendment the maximum period for the assessment to be completed is 18 months which was earlier only 12 months. Further sub-section 7 has been omitted which required the assessme .....

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g, the assessing authority may serve on such dealer a notice, requiring him to appear on a date and place specified therein and produce or cause to be produced such books of account, documents relying on which the assessing authority, may proceed to assess the said dealer. The dealer shall have a maximum of thirty days to produce the relevant books of accounts and documents. If the dealer fails to produce the books of accounts and documents, the assessing authority shall proceed to complete the .....

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under this section shall be completed within a period of six months from the date of service of the notice on the dealer. However the Commissioner may, on the merit of a case allow such further time not exceeding six months for completion of the assessment proceeding. Section 17 (Amendment of section 43) The assessing authority, after the amendment of this section can proceed to assess the turnover of the dealer based on the information available even if the dealer has not been earlier assessed .....

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the maximum period for the assessment to be completed is 18 months. Section 18 (Amendment of Section 50) Section 50 stands for payment and recovery of tax, sub-section (4) enumerates the details of cases where the amount so demanded, under various provisions are to be collected under section 50. As the new section 42A for assessment has been inserted in the amendment act 2015, suitable amendments were made to incorporate the section 42A paripasu to the existing provisions for the uniformity of .....

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contractor to execute such work, he shall not deduct any further amount towards tax in respect of the said work. Tax deducted at source by the deducting authority shall be transferred proportionately to the subcontractor by the principal contractor in such manner as may be prescribed. This limb talks about credit transfer mechanism which can really help the unnecessary rerun mechanism and can save resources of the Department and also poor assesses. Vide sub-section (1-a), where the Commissioner .....

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ot require a certificate of no deduction in respect of the said works contract. Section 20 (Amendment of Section 57) A new sub-section (2-a) under in section 57 is inserted, where in it is provided that, the Commissioner shall, in such manner and within such time, as may be prescribed, refund to a dealer, any amount of tax, deducted at source in respect of such dealer, in excess of the amount due from him under this Act. Section 21 (Amendment of Section 58) Sub-section (1) of section 58 has been .....

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rn or revised return for such quarter. To establish the correctness of the claim, the assessing authority may call for such additional information as he may think necessary. The assessing authority shall grand a provisional refund of 90% of the claim on the basis of verification within a period of ninety days from the date of application of such refund. However, if there is any delay in completing the verification due to non co-operation of the dealer or due to any other reason attributable to t .....

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(1) of Section 42-A within a period of twelve months from the end of the year containing tax periods relating to the returns for which refund has been granted. On assessment if it is found that the dealer has been granted excess refund as provisional refund, then the claim for excess refund shall be disallowed and the dealer shall be liable to pay an interest at the rate of 2% per month on such excess amount from the date of grant of provisional refund till the date of issue of assessment order .....

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e liable to pay tax under section 11 but are not required to file audit report has been dispensed with and hence such compliance is no longer required. Sub-section (2), talks about the penalty provisions if the application for amendment is not filed within the due time prescribed, the dealer may have to pay a penalty of ₹ 100 per day of default. However with the amendment in the said section the penalty shall be limited to a maximum amount of ₹ 10,000. The substituted provision will .....

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hin a period of three years from the date of admission of such appeal or as the case may be, in pending cases within a period of three years from the date of commencement of the Odisha Value Added Tax (Amendment) Act, 2015, after giving the appellant a reasonable opportunity of being heard and after causing such enquiry as he may deem necessary- (a) Confirm, reduce or annul the assessment of tax, or the imposition of interest or levy of penalty, if any; or (b) Enhance the assessment including an .....

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eply = Dear Sir, The Amendment to Sec.30 of the original Act puts the onus on the buyer of the goods within the State to ensure that his seller remits the tax to the Govt. Many State Governments are amending the Act to this effect. Starting with Mahalakshmi case in Maharashtra, many assessing officers disallow the ITC claimed by the Dealers on the ground that the seller did not remit the tax to the Govt. Madras High Court was in favour of the Dealers in such cases; however, recently the TN Govt .....

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been delivered. Provided further that the tax deferred under Sec.32 shall be deemed to have been paid under this Act for the purpose of this sub-section. Many a time, the unsuspecting buyer is penalized for no fault of his. This will come as a rude shock to the Buyer when his own assessment takes place may be after 4-5 years. He may be liable to pay interest and penalty also as prescribed under the relevant State law. In the case of M/s Milan Plywood Suppliers v State of Karnataka (judgment dt. .....

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rity was not justified in drawing the inference that the said three dealers are bogus merely on this fact. He should have made an enquiry to find out the genuineness of the transaction as set out by the Tribunal. It is only after such enquiry if the Assessing Authority is satisfied that the transaction in question is genuine one, the assessee has paid the money, he has received the goods and necessary entries are made in the books of accounts of the assessee, then merely because of the dealer ha .....

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