Salient Features of the Gujarat VAT Amnesty Scheme

Government of Gujarat as promised earlier, has now come out with the Amnesty scheme for the developers. This Scheme has come on the basis of taxability reinforced by the judgment of M/s. L&T Ltd.  Of Honourable Supreme Court dated 26/09/2013 in relation to levy of VAT on sale of immovable property.
Government observed that so many builders and developers were not registered and even those who are registered are not regular in paying VAT.   Looking to the current provisions of the act, which discouraged the developers to come out for fresh registration, forget payment of tax dues for the past period, Govt. has come out with following scheme of remission under provisions of Section 41 of Gujarat VAT Act 2003. The brief details of the scheme are as under:-
1) Coverage :-
a) This scheme is for those dealers engaged in Civil work contract whether registered or unregistered.  Assessment of the applicants under the scheme shall be carried out under Section 34 and remission of interest and penalty will have to be expressly mentioned in the assessment order.
b) Benefit of this scheme shall be available only for those transactions which started from 01/04/2006 and which are expressly getting covered because of the L&T  judgement referred to above. To elaborate – Benefit would be available under this scheme of Interest and penalty in case of a dealer where the flat booking is done and thereafter construction is complete and amount is realized from the ultimate customer.
c) Additionally, Benefit of this scheme would also be available to those dealers whose matters are pending under Assessment, Reassessment or Revision and where VAT, Interest & Penalty liability arise.
2) Composition tax @ 0.6% rate as per  Section 14 is payable on transactions as per Para 1(b) above (i.e. benefit available only on specified transactions) Additionally, If purchases have been made from registered dealers who have not properly discharged their VAT liability on sale, then the said tax will also have to be paid by the dealer making an application under this scheme.
3) Such works contractor who takes the benefit of this scheme, and who purchases from Unregistered Dealer (URD), is liable to pay purchase tax under section 9 and no ITC will be available under section 11 under the GVAT, 2003 on such payments.
4) If such person has purchased or brought goods from Outside Gujarat State (OGS) and used in execution of works contract, then on those purchases tax has to be paid as per applicable schedule rate. No remission will be given on such amount.
5) Remission will given on Interest / Penalty  as per Section 41 on the amount of tax payable as per serial number 2, 3 & 4 above.
6) Such dealers should have paid Entry Tax on purchase /branch transfer of machineries in the form of Vehicles from Outside of Gujarat State (OGS). If no entry tax had been paid at the time of purchase, it has to be paid  under this scheme. Tax shall also be charged on Other machineries (Non vehicle type) as per applicable schedule rate and remission will be given of interest and penalty on such tax amount.
7) Benefit under scheme shall be granted only if the tax amount under this scheme is paid within the scheme period.
8) Period of this scheme will be 180 days from the date of Notification i.e. from 14/10/2014. Application should be made in the format prescribed by the Commissioner.
9) Benefit under the scheme shall be given for transactions covered till the date of making an application under this scheme.
10) Benefit under the scheme can also be availed by dealers in Appeal. But this benefit would be applicable provided the appeal is withdrawn or the applicable transactions as mentioned in Para 1(b) in appeal are withdrawn by the dealer by filing a revised appeal in case there are other issues also covered in the appeal.
11)
a) No benefit will be given under this scheme except to the transactions mentioned in Para 1(b) above.
b) The benefit of this scheme can be withdrawn in case of any irregularities or tax evasion is observed in other transactions of the dealer i.e. other than those covered under Para 1(b).
12) No appeal can be filed by the dealer against the order issued under this scheme. If any tax, interest or penalty has been paid against the transactions as per Para 1(b), such amount will not be refunded by the department under any circumstances. For any clarification, or any issues related to the implementation of this scheme, the decision of the Commissioner of Commercial Tax shall be final.