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TAMIL NADU VAT AMENDMENT ACT, 2007

BILL NO 18 OF 2007

(AS PUBLISHED IN THE TAMIL NADU GOVERNMENT GAZETTE EXTRAORDINARY PART IV - SECTION 01 DATED 09/05/2007 ) 

SECTION WISE GIST OF AMENDMENTS

BY 

STVAT CONSULTING

(Consulting@stvat.com)

Section Heading

Text of Amendment

Gist

Effective Date  

Sub Section amended

Section 3 - Levy of taxes on sale of goods 

Sub Section (1) Clause (b)

 

In sub-section (1), for clause (b), the following clause shall be substituted, namely:-

"(b) Notwithstanding anything contained in clause (a), every dealer other than a casual trader or agent of a non-resident dealer who purchased goods within the state and effects sale of those goods within the state and whose total turnover for a year is not less than rupees ten lakhs shall pay tax under this Act."

Section: 03 - Levy of taxes on sales of goods - Subsection: 03(01) -  Minimum Turnover for Assessment Sub Clause (b) substituted restricting the basic exemption turnover limit of Rs.10 Turnover to dealers who purchased goods within the State and effects sale of those goods within the State.

 

01/01/2007

Section 3 - Levy of taxes on sale of goods 

Sub Section (2)

 

To sub-section (2), the following proviso shall be added, namely:-

"Provided that all spare parts, components and accessories of such goods shall also be taxed at the same rate as that of the goods if such spare parts, components and accessories are not specifically enumerated in the First Schedule and made liable to tax under that Schedule

Section: 03 - Levy of taxes on sales of goods - Subsection: 03(02) - Payment of VAT on goods specified in Part-B and C of the I schedule Proviso inserted for levy of VAT on

Spare parts, components and accessories of goods enumerated in the First Schedule as liable to VAT at the same rate as that of the goods.

01/01/2007

Section 3 - Levy of taxes on sale of goods

Sub Section (4)

For the expression "total turnover", the expression "turnover relating to taxable goods" shall be substituted;

Section: 03 - Levy of taxes on sales of goods - Subsection: 03(04) - composition option for reseller of goods purchased within the State The expression "turnover relating to taxable goods" substituted

Providing for levy of composition tax only on turnover relating to taxable goods.   

01/01/2007

Section 3 - Levy of taxes on sale of goods

First proviso to sub-section 3(4)

For the first proviso, the following proviso shall be substituted, namely:-

"Provided that such dealer shall not collect any amount by way of tax or purporting to be by way of tax." 

Section: 03 - Levy of taxes on sales of goods - Subsection: 03(04) - composition option for reseller of goods purchased within the State - Dealer under composition scheme are not eligible to collect the 0.5% composition tax in the sale invoice.

01/01/2007

 

 

 

Section 6 - Payment of tax at compounded rates by works contractor

Sub Section 6(1)

In sub-section (1), after the expression "every dealer", the following expression shall be inserted, namely:-

"other than the dealer who purchases goods from outside the state or imports goods from outside the country;

Section 06 - Payment of tax at compounded rates by works contractor - Subsection: 06(01) - Rate of composition on different types of Works Contract - Eligibility of works contractor to opt to pay tax is restricted to dealers who do not purchase or import  goods from outside the State. i.e Composition option is eligible only for a dealer procuring goods from within Tamil Nadu.   

01/01/2007

 

 

Section 6 - Payment of tax at compounded rates by works contractor

Sub Section 6(5)

 

For sub-section (5), the following sub-section shall be substituted, namely:-

"(5) The dealer who pays tax under this section shall not collect any amount by way of tax on purporting to be by way of tax and shall not be entitled to input tax credit on the goods purchased by him."

Section: 06 - Payment of tax at compounded rates by works contractor - Subsection: 06(5) substituted specifying that a  Dealer executing works contract under composition scheme besides being ineligible for Input Tax Credit shall also not collect any amount by way of tax or purporting to be by way of tax

01/01/2007

 

 

Section 7 - Levy of tax on food and drinks

Sub Section 7(1)

In section 7 of the principal Act, in sub-section (1), in clause (b), after the expression "in clause (a)", the following expression shall be inserted, namely:-

"whose total turnover is not less than rupees ten lakhs for a year".

Section: 07 - Levy of tax on food and drinks - Subsection: 07(01) - Rate of tax on sale of Food and Drinks by Star Hotels and Others Hotels, Restaurants and Sweet-Stalls Sub Clause (b) amended providing for liability to tax of the specified dealers whose total turnover is not less than rupees ten lakhs for a year. 

01/01/2007

Section 8 - Payment of tax at compounded rate by hotels, restaurants, sweet-stalls

(1) In the marginal heading for the expression "and sweet-stalls", the expression "sweet-stalls and bakeries" shall be substituted;

(2) Sub-section (1) shall be re-lettered as "clause (a)" of sub-section (1);

(3) After clause (a) as so re-lettered, the following clause shall be inserted, namely:-

"(b) Notwithstanding anything contained in clause (a) of sub-section (1) of section 3, every dealer in bakery products whose total turnover is not less than rupees ten lakhs but not more than rupees fifty lakhs for the year on the sale of unbranded bakery products and other ready to eat unbranded foods, may, at his option, instead of paying tax in accordance with the provisions of sub-section (2) of section 3, pay tax at the rate specified in the Third Schedule.".

Section: 08 - Payment of tax at compounded rate by hotels, restaurants and sweet-stalls - Subsection: 08(01) - Option to Hotels, Restaurants and Sweet-Stalls with annual Turnover less than Rs.50 lakhs to pay tax at compounded rates -

 Bakeries are specified as eligible to pay tax at compounded rate on sale of unbranded bakery products.  

 

01/01/2007

 

 

Section 19 - Input Tax Credit

Sub Section 19(3)

In sub-section (3), in clause (a), for the expression, "wholly for use in the course of business of taxable goods", the expression "for use in the manufacture of taxable goods" shall be substituted;

Section: 19 - Input tax credit - Subsection: 19(03) - Eligibility of Input Tax Credit on Capital Goods Sub Clause (a) amended to specify that the capital goods should be used in the manufacture of taxable goods. 

01/01/2007

 

 

Section 19 - Input Tax Credit

Sub Section 19(4)

In sub-section (4) for the expression "four percent of tax", the expression "three per cent of tax" shall be substituted;

Section: 19 - Input tax credit - Subsection: 19(04) - Eligibility of Input Tax Credit with reference to Stock Transfer -

 Disallowance of Input Tax Credit on stock transfer outside the State is reduced to 3% consequent to  reduction of CST rate on sale to registered dealers from 4% to 3% with effect from 01/04/2007

01/04/2007

 

 

Section 19 - Input Tax Credit

Sub Section 19(6)

To sub-section (6), the following proviso shall be added, namely:-

"Provided that on the purchase of capital goods which are used in the manufacture of exempted goods and taxable goods, input tax credit shall be allowed to the extent of its usage in the manufacture of taxable goods in the manner prescribed.". 

Section: 19 -  Input tax credit - Subsection: 19(06) - Ineligibility of Input Tax Credit on Capital Goods used in the manufacture of Exempt Goods Proviso inserted providing for Input Tax Credit to the extent of use in manufacture of taxable goods.

 

01/01/2007

 

 

Section 38 - Registration of Dealers

Sub Section 38(1)

In section 38 of the principal Act, in sub-section (1) in clause (a), for the expression "whose total turn over in respect of purchase and sale within the State", the expression "who purchases goods within the state and effects sale of those goods within the state and whose total turnover" shall be substituted.

Section: 38 - Registration of dealers - Subsection: 38(01) - Annual Turnover limit for registration for dealers effecting purchase and sale within the State - Rs.10 lakhs and for other dealers- Rs.5 lakhs Sub Section amended specifically providing that the annual turnover limit of Rs. 10 lakhs for registration of dealer shall apply only to a dealer effecting purchase within the State and effect sale within the State. 

01/01/2007

Section 88 - Repeal and saving

Sub Section 88(6)

In section 88 of the principal Act, in sub-section(6), in clause (b), for the expression "thirty days", the expression "fifty nine days" shall be substituted.

Section: 88 - Repeal and saving - Subsection: 88(06) - Entitlement of credit of tax paid under the TNGST Act,1959 on goods held in stock on the date of commencement of the TN VAT Act,2006 Time limit for submission of claim of PreVAT stock extended to 28/02/2007 by circular regularised by amending the sub section. 

01/01/2007

 

 

   

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