Haryana Govt amends composition scheme for developers

By | October 5, 2015
(Last Updated On: October 5, 2015)

HARYANA VALUE ADDED TAX (THIRD AMENDMENT) RULES, 2015 – SUBSTITUTION OF RULE 49A & INSERTION OF FORM VAT-CD1 AND FORM VAT-R13

NOTIFICATION NO.23/H.A.6/2003/S.60/2015, DATED 24-9-2015

Whereas the State Government is satisfied that circumstances exist which render it necessary to take immediate action in public interest;

Now, therefore, in exercise of the powers conferred by sub-section (1) of section 60 read with the proviso to said sub-section of the Haryana Value Added Tax Act, 2003(6 of 2003), the Governor of Haryana hereby makes the following rules further to amend the Haryana Value Added Tax Rules, 2003 by dispensing with the condition of previous notice, namely:—

1. (1) These rules may be called the Haryana Value Added Tax (Third Amendment) Rules, 2015.

(2) They shall come into force with effect from April 1st, 2014.

2. In the Haryana Value Added Tax Rules, 2003 (hereinafter called the said rules), for rule 49-A, the following rule shall be substituted, namely :—

“49A LUMPSUM SCHEME IN RESPECT OF DEVELOPERS

(Section 9).— (1) A developer liable to pay tax under the Act, and duly registered, may pay, as an option, in lieu of tax payable by him under the Act, by way of composition of lump sum tax calculated at the compounded lump sum rate of one percent of entire aggregate amount specified in the agreement or value specified for the purpose of stamp duty, whichever is higher, in respect of the said agreement. The developer opting for this scheme here-in-after shall be referred to as the composition developer.

(2) The composition developer opting for composition under this scheme shall,—

(i)purchase goods for use in the execution of the works contract from a registered dealer of the State but shall not be entitled to claim any input tax credit thereon. If the input tax in respect of any goods purchased in the State has been availed of by a developer and such goods are held in stock at the time of option of composition scheme, the input tax in respect of such goods shall be reversed. In case any goods used in the execution of works contract are procured or purchased from dealers other than the registered dealers from within the State or from outside the State on which no tax has been paid to the State, the composition developer shall be liable to pay an amount equal to the amount of tax that would have been payable, had the goods been purchased within the State from a registered dealer.
(ii)be entitled to purchase or receive goods, from any place outside the State including imports from out of India, against prescribed declaration forms, to be used in the execution of the contract at any time during the period for which the composition remains in force under this Scheme, but he shall pay tax at the rate of 4% on purchase price thereof and on goods purchased and or received from any place outside the State and held in stock at the time of option of the composition scheme, and such tax shall not be adjustable towards his composition tax liability;
(iii)not be entitled to use declaration Form VAT D-1 for purchasing goods at concessional rate of tax from within the State;
(iv)be treated as non-vat dealer and shall not be eligible to claim input tax credit under section 8 of the Act;
(v)not collect any amount by way of tax under the Act;
(vi)not issue “Tax Invoices”;
(vii)retain the originals of all tax invoices and all the retail invoices for all his purchases;
(viii)not be entitled to any refund

(3) The tax period for the composition developer shall be monthly and the payment of lump sum in lieu of tax shall be paid by the composition developer within fifteen days of the close of the month:

Provided that if a composition developer fails to make the payment of tax including tax on purchases in time under this scheme, then he shall be liable to pay interest as per the provisions of sub-section (6) of Section 14 of the Act.

(4) Where the composition developer awards any portion of his contract to another contractor or sub-contractor, such composition developer shall not be eligible for any deduction on account of any tax paid by the contractor or the sub contractor under the Act.

(5) A developer may opt for payment of tax in lump sum with effect from the 1st April, 2014 in accordance with the provisions of this Scheme, by submitting an application in Form VAT-CD1 to the appropriate assessing authority, within sixty days of the issue of the notification. However, a developer getting registration certificate after the issue of the notification, may opt for the scheme within thirty days of the issue of registration certificate under the Act. A registered developer can also exercise such option from the beginning of a financial year by submitting the application to the appropriate assessing authority within thirty days of the commencement of the financial year concerned.

(6) A composition developer who has opted for lump sum payment of tax under the lump sum scheme notified on the 12th August, 2014, shall be deemed to have opted for lump sum payment of tax under this scheme. In case the tax deposited under the scheme notified on the 12th August, 2014 is more than the tax liability calculated under this Scheme, the excess tax shall be adjusted against the future tax liability but no adjustment on account of such excess tax shall be allowed if the composition developer opts out of the Scheme.

(7) A composition developer shall furnish a quarterly return in Form VAT R-13 to the appropriate assessing authority and also submit proof of payment of tax alongwith the return.

(8) The Excise and Taxation Commissioner shall be competent to issue guidelines, specifying the procedure and the forms etc. for the purpose of availing, compliance and monitoring of this Scheme.

(9) For the removal of doubts, it is hereby made clear that nothing contained here-in-above shall be construed as conferring any benefit, concession or immunity on the composition developer other than the benefit, concession or immunity granted under the Scheme.

3. In the said rules, after the existing “Form VAT C-5”, the following Form shall be inserted, namely:—

“FORM VAT-CD1

(See rule 49A (5))

Application for opting Lump Sum Composition Scheme in respect of Developers under rule 49A of the Haryana Value Added Tax Rules, 2003.

4. In the said rules, after the existing “Form VAT R-12”, the following Form shall be inserted, namely:—

“Form VAT – R13

[See Rule 49A(7)]

Form of Return to be furnished by a composition developer

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