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GOVERNMENT OF
DEPARTMENT OF TRADE AND TAXES (POLICY BRANCH) BIKRIKAR BHAWAN, I.P. ESTATE, NEW DELHI-110 002
No.F.6(44)/P-I/VAT/2007/144-156 Dated: 05.06.2007
CIRCULAR No. 3 OF 2007-08
Sub : Impact of amendments introduced vide the Taxation Laws
(Amendment) Act, 2007.
Clarifications and confirmations are being sought from different quarters regarding the recent amendments in the provisions of the Central Sales Tax Act, 1956 (CST Act). It is, thus, clarified for the information of all concerned that the Government of India has recently, vide the Taxation Laws (Amendment) Act, 2007, made certain amendments in the CST Act and the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (ADE Act). These amendments have brought following changes with effect from 1st April, 2007.
1. Reduction of rate of tax on Central Sales to registered dealers against the Declaration Form ‘C’ from 4% to 3%.
2. Withdrawal of Form ‘D’ facility from the Government Departments/Organizations other than those registered. Now, all Central Sales to such Government Departments/Organizations attract tax at the rates applicable to Central Sales to unregistered dealers.
3. Central Sales to unregistered dealers or to registered dealers without declaration in Form ‘C’ or other Forms prescribed under the CST Act shall attract tax at the rate equal to the local rate of tax (i.e. the rate applicable within the originating State).
4. ‘Tobacco and tobacco products’ have been omitted from the list of declared goods as given in section 14 of the CST Act as well as from First Schedule of the ADE Act, making the entry No. 49 (as existed up to 13/05/2007) of the First Schedule of the DVAT Act redundant. Thus, all 'tobacco and tobacco products' have become taxable @ 12.5% with effect from 01/04/2007 being not covered by any Schedule of the DVAT Act, 2004. However, Government of Delhi has exempted 'Unmanufactured tobacco, bidis and tobacco used in the manufacture of bidis and hooka tobacco' with effect from 14.05.2007 from levy of VAT by appropriately amending the entry No. 49 of the First Schedule vide Notification No.F.3(2)/Fin(T&E)/ 2007-08/(i)/dsfte/352 dated 14.05.2007.
This issues with prior approval of the Commissioner, VAT.
(G.D. GROVER)
Value Added Tax Officer (Policy)
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