Gentlemen/Sir/Madam,

Certain amendments are made to the Allied Acts by the Act No. XIII of 2004. In order to make these amendments operational, it has become necessary to amend the relevant provisions of the rules made under allied Acts. Certain other amendments to the rules have also been made.

These amendments have been notified on 5th January 2005. The gist of the important amendments carried out is as under:

1. Amendment to Central Sales Tax (Bombay) Rules, 1957.

   1. Amendment to Rule 5:
      Rule 22 of the Bombay Sales Tax Rules has been amended w.e.f. the 1st July 2004. The amendment has two features. Every registered dealer whose turnover of sales or of purchases has exceeded Rs. 40 lakh in the year in respect of which he is required to file an annual return is now required to furnish the information in Annexure-A along with the respective annual return. (see para 9(1) of Tr. Cir 16T of 2004)

      The amendment to rule 5 of the C.S.T. (Bombay) Rules, 1957 provides that every dealer who is required to furnish Annexure-I under the B.S.T. Rules, 1959, shall also file an annexure (Annexure-A) along with his annual return in Form III (BB). Form of the annexure is provided in the rules.

      Under the 2nd amendment to rule 22, every registered dealer is required to file a return in Form N-18D in respect of the period from 1st April 2003 to 31st March 2004 with the assessing officer. The corresponding amendment is now made to rule 5 of the Central Sales Tax (Bombay) Rules, 1957. The amendment provides that every registered dealer, who is required to furnish the return in Form N-18D under rule 22 of the B.S.T. Rules, 1959, shall be required to file the return in Form III-D for the same period with the assessing officer. (See para 9(2) of Tr. Cir 16T of 2004).
       

   2. Amendment to Rule 9A:
      Section 33 of the B.S.T. Act, 1959 is now amended by introducing a new sub-section, namely sub-section (6B). The newly inserted sub-section provides for transaction-wise assessments under the B.S.T. Act, 1959. The provision applies equally to assessments under C.S.T. Act. Notice for calling the dealer for transaction-wise assessment under C.S.T. Act shall be in form VI(E). The form of notice is provided in the rule. (See para 11 of Tr. Cir 16T of 2004).
       

   3. Insertion of rule 9D:
      The B.S.T. Act is now amended by inserting a new section, namely section 33D. Under this section, the assessing officer can cancel ex-parte assessment orders under certain circumstances. This provision applies equally to assessment under C.S.T. Act, 1956. ( See para 12 of Tr. Cir 16T of 2004).

      A new rule, namely rule 9D is now inserted in C.S.T. (Bombay) Rules, 1957, to deal with the procedure regarding cancellation of ex-parte assessment orders. The form of application [Form VII (BB)] for cancellation of such order and the form [Form VII (C) ] for cancellation order are also provided under the rule.
       

2. Amendment to the Bombay Sales of Motor Spirit Taxation Rules, 1958.
   1. Insertion of Rule 16B, 16C and 16D:
      The Motor Spirit Taxation Act is now amended by Mah Act XIII of 2004. By this amendment, a new section dealing with assessment is provided. Necessary amendments are now carried out in the Motor Spirit Taxation Rules. The newly inserted rules 16B and 16C prescribe a procedure of assessment. The form of notice for assessment is also prescribed. A period of 15 days is now required to be given while calling a trader for assessment. The form D-IV of assessment order is also prescribed under rule 16D.
       
   2. Insertion of rule 16E:
      Rules 16E is inserted to provide for the period for which assessment case records may be preserved. The rule provides that the assessment case record shall be preserved for a period of three years after the completion of last proceedings under the Act or for ten years next following the period to which the assessment relates whichever is later.
       

   3. Insertion of rule 17A, 17B, 17C, 17D, 17E, 17F and 17G:
      After rule 17, rule 17A 17B, 17C, 17D,17E, 17F and 17G are inserted to provide interest on refund and interest on delayed refund and the manner in which the refund is to be granted to traders. The newly inserted rules make provision for the order sanctioning refund, refund payment order, and refund adjustment order and cancellation of refund adjustment order. The forms of refund adjustment order (Form E-I) and interest on amount of refund/ interest on delayed refund (Form F-I) are also provided.
       

   4. Amendment to rule 21:
      This rule makes important amendments regarding the first and second appeal. If the original order is passed by the Motor Spirit Sales Tax Officer, then the first appeal is to be filed with the Asstt. Collector of Motor Spirit Sales Tax. If the original order is made by the Asstt. Collector of Motor Spirit Sales Tax, then the first appeal will lie with Deputy Collector. If the original order is passed by the Dy. Collector, Addl. Collector or Collector of Motor Spirit Sales Tax, then the first appeal shall lie to the Tribunal. The second appeal against any order passed in first appeal shall lie with Maharashtra Sales Tax Tribunal.
       

3. Amendment to Maharastra Purchase Tax on Sugarcane Rules, 1962.

   Insertion of rule 11A and 13A:
   Two new rules, namely rules 11A and 13A are introduced. The first rule provides the form VII A for assessment order and the second rule provides for form XI for order sanctioning interest on refund or delayed refund.
    

4. Amendments to Maharashtra State Tax on Professions, Trades, Callings and Employments Rules, 1975.

   1. Amendment to rule 12:
      The amendment is made in view of substitution of section 7, which deals with assessment of Employers. A notice in Form IV-A is now provided for the purposes of calling for assessment. The procedure of assessment under the Act is made similar to procedure for assessment under B.S.T.Act, 1959. (See para 1 of Annexe-D of Tr. Cir. 11T of 2004).
       

   2. Insertion of Rule 12A:
      The amendment provides the time and manner by which notice shall be served for the purposes of assessment under section 7. The date fixed for compliance of the notice shall not be earlier than 15 days from the date of service thereof.
       

   3. Amendment to rule 15:
      The rule is amended in view of amendment of section 7.
       

   4. Amendment to rule 22:
      The rule is amended to prescribe the manner and the conditions for appointing sales tax employees as recovery agent and also prescribes the powers and authority awarded to the sales tax employees. The rule also prescribes the Form XIVA-1 for application for obtaining authorization for working as a recovery agent under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.
       

   5. Insertion of rule 27A:
      The rule provides Form XIX A for the order sanctioning interest on refund or delayed refund. The rule is inserted in view of insertion of section 19A and 19B under the Act. The required proforma is also provided under the rules. (See para 3 and 4 of the Annexe-D of Tr.Cir. 11T of 2004).
       

5. Amendments to the rules under Maharashtra Sales Tax on the Transfer of Right to use any goods for any purpose Act, 1985.

   1. Insertion of rule 16A:
      Section 4B is inserted in the Act to provide exemption to a certified registered dealer whose place of business is situated in the Special Economic Zone (SEZ). To give effect to this amendment, necessary amendment to the rule is carried out by inserting rule 16A. This rule is inserted to prescribe the Form XXV-A and to provide the following conditions which are to be complied by a certified registered dealer while issuing declaration in Form XXV-A.

      The dealer availing the benefit of exemption should be certified by the Commissioner of SEZ and he has to comply with the recitals and conditions of the declaration subject to which the exemption certificate is granted. The dealer is not entitled to claim any drawback, set -off in respect of the transaction for which the newly introduced declaration form is issued. The dealer has to furnish account of the purchases effected by him on the new declaration Form to the Commissioner for each financial year by the 30th June of the succeeding financial year in the form and manner required by the Commissioner. The declaration shall be in triplicate and bear seal and signature of the assessing authority. The dealer has to furnish a separate return in respect of such industrial unit and is not entitled to obtain the permission to furnish consolidated return. (See para 1 of Annexe-E of Tr. Cir. 11T of 2004).
       

   2. Insertion of rule 16B:
      Section 8B and 8C are inserted to provide interest on amount of refund in respect of any period of assessment commencing on or after 1st April 2004 and interest on amount of delayed refund if such refund is granted after 1st July 2004. To give effect to the said amendment, rule 16B is inserted to prescribe Form XXVI for interest payment order on amount of refund or on delayed refund. (See para 2 and 3 of Annexe-E of Tr. Cir 11T of 2004).
       

6. Amendments to Maharashtra Tax on Luxuries Rules, 1987.

   1. Insertion of rule 19A:
      Section 22A is inserted in the Act for calculation of cumulative quantum of benefits (CQB) under the New Package Scheme of Incentives for Tourism projects. To give effect to this amendment rule 19A is inserted for the purposes of calculation of cumulative quantum of benefits enjoyed by a hotelier holding a Certificate of Entitlement under Package Scheme of Incentives for tourism projects or, as the case may be, Package Scheme of Incentives for tourism projects 2000 in respect of all relevant periods.
       

7. Amendments to Maharashtra sales tax on the Transfer of Property in Goods involved in the execution of Works Contract (Re-enacted) Rules, 1989.

   1. Insertion of rule 16A:
      Section 4C is inserted in the Act to provide exemption to a certified registered dealer whose place of business is situated in the Special Economic Zone (SEZ). To give effect to this amendment necessary amendment to the rule is carried out by inserting rule 16A. This rule is inserted to prescribe the Form XLV and to provide the following conditions which are to be complied by a certified registered dealer while issuing declaration in Form XLV.

      The dealer availing the benefit of exemption should be certified by the Commissioner of SEZ and he has to comply with the recitals and conditions of the declaration subject to which the exemption certificate is granted. Dealer is also not entitled to claim any drawback, set-off in respect of the transaction for which the dealer has issued a declaration form. The dealer has to furnish account of purchases effected by him on the new declaration form to the Commissioner for each financial year by the 30th June of the succeeding financial year in the form and manner required by the Commissioner. The declaration shall be in triplicate and bear seal and signature of the assessing authority. The dealer has to furnish a separate return in respect of such industrial unit and is not entitled to obtain the permission to furnish consolidated return. (See Para 1 of Annexe-G of Tr. Cir. 11T of 2004)
       

   2. Insertion of rule 16B:
      Section 9A and 9B are inserted to provide interest on amount of refund in respect of any period of assessment commencing on or after 1st April 2004 and interest on amount of delayed refund if such refund is granted after 1st July 2004. To give effect to the said amendment, rule 16B is inserted to prescribe Form XLVI for interest payment order on amount of amount of refund or on amount of delayed refund. (See para 2 and 3 of Annexe-G of Tr. Cir 11T of 2004).
       

8. As per notification dated 30th July 2004, sub-rule (2) is added in rule 44D of the B.S.T. Rules, 1959, whereby the claimant dealer is entitled to claim draw back set-off, refund or reimbursement of entry tax paid under rules 41D, 41F, 42AB, 42AC, 42AD and 43D on import of goods under the Maharashtra Tax On the Entry of Goods into Local Areas Act, 2003. However, in para 16 of Tr. Cir. No. 16T of 2004 rules relevant rules are wrongly mentioned as 41D, 41F, 41G, 42AC and 43D. The members of the trade are requested to take due note. A corrigendum is also issued by the Government Gazette dated 30th July 2004, on 6th January 2005, by virtue of which dealer is eligible to get set-off under the above provisions with effect from 1st October 2002.
    

9. The circular instructions issued as per cir No. 17T of 2003 dated 10th July 2003 regarding treatment of iron and steel in stock as on the 1st May 2003 (with reference to Government notification No.STA-2003/CR-66/Taxation-2 dated 8th July 2003) will continue to apply although the amendments to rule 42M, 46A and 46C are carried out (These are consequential amendments made in view of withdrawal of VAT on iron and steel w.e.f. 1st May 2003. (See para 15 of Tr. Cir 16T of 2004)

   This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.

   You are requested to bring the contents of this circular to the notice of members of your Association.

Yours faithfully,

(B.C.KHATUA)
Commissioner of Sales Tax
Maharashtra State, Mumbai.