02 December 2008
Extract Of Budget Speech 2008-2009
132. Speaker Sir, there are continuous demands and representations from the local industries manufacturing “capital goods” to allow their interstate sales to unregistered dealers to tax at par with local sales. These capital goods are manufactured by the local industries which do not have market within the State and having put a condition of Form VAT XXX, their products do not qualify for a concessional rate of tax available to the capital gods in the interstate market as the purchaser cannot issue them C form. Sir, to support local industries, I would like to vacate the condition of Form VAT XXX for goods being covered by the term “capital goods”, when they are sold to unregistered dealer in the inter-state market and allow them to be taxed at 4% CST only. This will promote the sale of products of local industries outside the State of Goa.
133. Speaker Sir, the banking section in India has developed a very good IT network all over the country. Banks today are giving 24 hours service to the account holders through ATM machines. Sir, Goa is having one reputed industry manufacturing ATM machines and meeting the requirements of various leading banks in India. ATM is however not included in the list of IT product and therefore, the said commodity is taxable at 12.5%. Speaker Sir, ATM machines are purchased by Banks to widen their cash networks, but banks are not registered dealers and therefore they cannot support their purchases with “C” form declaration. Major takers of ATM being inter-state customers and the tax rate being 12.5%, my industry is loosing the business and therefore, to attract the sales, the goods produced in Goa are generally stock transferred to other states and billed accordingly, where the Government of Goa is loosing heavy tax revenue. To safeguard State’s tax revenue on such transaction, I propose to specify the ATM in Schedule “B” taxable at 4%. Government had issued a notification for inter-state sale of ATM at 1% CST, but with the “C-Form being made compulsory, the said notification has practically become in operative. Now, with its entry in Schedule “B”, the interstate sales will be taxed at 4% and my government shall be ensured of revenue realization. 134. Speaker Sir, the plastic and paper bags are being generally used by the retailer in packing of consumer goods. These bags when used by
industries are considered as “industrial packing” taxable at 4%. Since use of plastic/paper bags by retailers do not amount to industrial inputs, they are taxable at 12.5% and the retailers are tempted to buy them from inter-state suppliers where Government of Goa is loosing tax revenue. This is because the retailers use them as service to customers. Resultantly, the local industries suffer. To support my industry and encourage local retailers to purchase these plastic/paper bags as packing material, I propose to specify the said goods in Schedule “B” taxable at 4%. The amendment will be effective from the next financial year.
135. Speaker Sir, the time allowed for completion of assessment as provided in section 29, is two years from the end of the financial year. The VAT is introduced in Goa w.e.f. 1.4.2005 and therefore, as per the above provision the assessments for the year 2005-06 are due by 31.3.2008. Sir, it took almost one year for stabilization of VAT and thereafter the time is consumed on the computerization of records, training of staff and various other issues of system stability of VAT and the department and dealers are in difficulty in completing the time barring assessments of 2005-06 by March 2008. Sir, I therefore, feel it incumbent on me to give special powers to the Commissioner by way of proviso or otherwise to grant extension of time not exceeding one year for completing such time barring assessments, which will facilitate the department to ensure completion of all pending assessments within the extended time.
136. Speaker Sir, photographic paper and chemicals are manufactured in Goa, for sale within and outside the State. The photographic paper manufactured locally has got more market in other States. The UT of Pondicherry is also manufacturing these goods and effecting inter-state sales at very low CST. Since the purchasers of these goods are service oriented units, they purchase such goods from grey market and avoid payment of tax. This Government had recently specified the said items as industrial inputs, so that our units are supported and tax loss is captured. Industrial inputs being a conditional entry, the sale of products to unregistered interstate purchasers (photographic labs) is taxable at 12.5% and therefore the notification for concessional rate for photographic paper does not become effective. The chemicals are separately specified in the schedule B and therefore it is available to tax at 4% CST. To support the industry and to ensure proper collection of tax on these sales, I propose to specify the said commodity in Schedule “B” taxable at 4%.
02 December 2008
It is 10% or the rate of value added tax of that commodity whichever is higher. Pl see section 8(2)(b) of the Central Sales tax Act,1956.
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