Punjab Vat query.

This query is : Resolved

sony10 (Querist)
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23 April 2010 Dear Experts,

Please help me to know the following things regarding Punjab Vat:

QUERY NO.1: CST sale against form C is 2%, without form C is 5.5%. Whether the 5.5% is to be deposited in State's vat treasury or should it be deposited in CST. The reason for this doubt is: When we know a customer is from another state (without TIN) we know it is CST sale without form C. But when we do not know where the customer will take the goods (like Scrap purchasers) then...?

QUERY NO.2: Vat in Punjab is 5% + 10% surcharge on vat. Whether this surcharge is to be deposited using any different challan or it should be deposited as earlier with VAT-2 and VAT-2A challans.

QUERY NO.3: Under new form VAT-23 & VAT-24 a new column is added where the stage of supplier (1st, 2nd, 3rd or 4th stage) is to be mentioned. How can we determine that the supplier / purchaser belongs to which stage.

Thanks in advance for great help.

sachin alwadhi

sachin alwadhi (Expert)
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23 April 2010 without c form u have to pay 5.5% as a cst deposit.
there is no provision for separate deposit of service tax
if u are manufacturer then u should show the sales as ist stage&purchase as 2 stage.in other case u can shown the sales 2nd &purchases as 3rd or 4th stage.on which u have not eligible for input tax credit u can shows as 4th stage purchase.

sony10

sony10 (Querist)
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27 April 2010 Dear Mr. Sachin Alwadhi,

Thanks for your help. Please elaborate on stages of supplier.

We are manufacturer & supply our products (conveyor belts)to machinery manufacturer & other food, etc. manufacturers who install our products on their machine. So what is the our stage.

We purchase raw materials from manufacturers, traders & hardware shops. So what is the stage of our suppliers.

In your above reply i.e.; "there is no provision for separate deposit of service tax", i hope you mean to say surcharge & not service tax.

Thanks for your assistance.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 Certainly! Here are the detailed answers to your queries about Punjab VAT:

### **QUERY NO. 1: CST Sale Against Form C**

**Understanding CST Rates and Form C:**

- **CST Rate with Form C:** When sales are made to a registered dealer in another state and Form C is provided, the CST rate is generally 2%.
- **CST Rate without Form C:** If Form C is not provided, the CST rate is usually higher (e.g., 5.5% in Punjab).

**Deposit of CST Without Form C:**

- **Where to Deposit CST Without Form C:** The higher CST rate (e.g., 5.5%) should be deposited into the State's VAT treasury where the sale is made. This is because, without Form C, the transaction is treated as a regular inter-state sale subject to the higher rate of CST applicable in that state.
- **Procedure:** If you know the customer is from another state and does not provide Form C, you should collect and deposit the CST at the higher rate (5.5%) into the state's VAT treasury. This applies even if the destination of the goods is unknown. The CST rate applicable without Form C is treated as the default rate for such transactions.

### **QUERY NO. 2: VAT Surcharge in Punjab**

**Surcharge Details:**

- **VAT Rate and Surcharge:** In Punjab, VAT is charged at 5% with an additional 10% surcharge on VAT.
- **Deposit of Surcharge:**
- **Challan for Surcharge:** The surcharge on VAT should be deposited along with VAT using the same VAT-2 and VAT-2A challans. There is no separate challan required specifically for the surcharge.
- **Combined Deposit:** Ensure that the surcharge amount is included in the total VAT amount while making the deposit using the VAT-2 and VAT-2A challans.

### **QUERY NO. 3: Stages of Supplier and Purchaser in VAT Forms**

**Understanding Stages:**

- **Stage Classification:** In VAT systems, the stages refer to the stages of dealers involved in the supply chain:
- **1st Stage Dealer:** Manufacturer or importer who sells goods to the next stage.
- **2nd Stage Dealer:** Wholesaler or distributor who purchases from the 1st stage dealer.
- **3rd Stage Dealer:** Retailer who buys from the 2nd stage dealer.
- **4th Stage Dealer:** End-user or final consumer who buys from the 3rd stage dealer.

**Determining Stages for VAT Forms:**

- **Your Stage:** As a manufacturer of conveyor belts supplying to machinery and other manufacturers, you are a **1st Stage Dealer**.
- **Supplier Stages:**
- **Suppliers of Raw Materials:** If you purchase raw materials from manufacturers, traders, or hardware shops, their stages would be:
- **Manufacturers** are typically **1st Stage Dealers**.
- **Traders or Hardware Shops** could be **2nd Stage Dealers** or **3rd Stage Dealers**, depending on their role in the supply chain.

**Clarification on Surcharge and Service Tax:**

- **Surcharge vs. Service Tax:** In the context of Punjab VAT, the "surcharge" is an additional amount on VAT and should be deposited using VAT-2 and VAT-2A challans. There is no provision for separate deposit of service tax in this context. The service tax is a separate tax regulated under service tax provisions and is not related to VAT surcharge.

### **Summary:**

1. **CST Rate:** Without Form C, deposit the higher CST rate (e.g., 5.5%) into the State's VAT treasury.
2. **Surcharge:** The 10% VAT surcharge is deposited using the VAT-2 and VAT-2A challans, combined with the VAT amount.
3. **Stages:** Determine the stage of suppliers and purchasers based on their role in the supply chain (1st, 2nd, 3rd, or 4th stage). As a manufacturer, you are a 1st Stage Dealer.

These clarifications should help you navigate the VAT and CST requirements more effectively. If you have further queries or need additional assistance, feel free to ask!