THE RAJASTHAN VALUE ADDED TAX ACT, 2003 has come into force on 30th March 2003 i.e. date when assent of the Governor was received. Value added tax is act for levy of tax on sale or purchase of goods and to introduce value added system of taxation in the State of Rajasthan. Below Mention Act is updated till 8,March 2016 Last Budget of Rajasthan Government.
Summary of Rajasthan VAT 2003
Section 1 of RVAT Act 1. Short title, extent and commencement date for RVAT Act
Section 2 of the RVAT Act deals with different definition of the terms covered in the RVAT Act 2003. Important terms are 2(6) Meaning of Business , 2(10) Meaning of Term Contractor, 2(11) who is treated as Dealer or considered as dealer, 2(15) what do we mean by term Goods, 2(26) Place of Business and 2(35) & 2(36) definition of term sales and sales price and Most Sought after term works Contract is covered in section 2(44).
Section 3 of the RVAT Act deals with Incidence of tax i.e. who is liable to Rajasthan VAT. Importer of goods, manufacturer of goods with annual turnover of Rs 5 Lakhs and Trader of Goods having annual turnover exceeds Rs 10 lakhs. Also as per section 3(2) dealer having turnover of less than Rs 75 lakhs can opt for composition scheme and Turnover for composition scheme is calculated after deducting the turnover of goods covered in Schedule 1 of RVAT Act (Exempted Goods). Composition Scheme means that dealer will not charge VAT from customer/buyer but will pay specified percentage of turnover as fee in lieu of tax.
Section 4 of the RVAT Act deals with Levy of tax and its rate i.e. Taxable turnover is taxable at rates of VAT given in Schedule III to Schedule VI.
Section 5 of the RVAT Act deals with payment of lump sum in lieu of tax.
Section 6 of the RVAT Act deals with Levy of tax by weight, volume, measurement or unit on certain goods.
Section 7 deals with Levy of tax on livestock: Tax shall be payable at such rate per head not exceeding five hundred rupees as may be notified.
Section 8 of RVAT Act Deals with taxation of Works Contract and Exemption of tax i.e. Exemption from Rajasthan VAT. Section 8(1) provides the list of goods covered under Schedule 1 which are exempted from Rajasthan VAT.Section 8(2) covers list of organisation to whom exemption form RVAT is given by the Government of Rajasthan. Exemption Scheme was given in Notification No 77 dated 11.08.2006 which has been amended Notification 3082 (F.12(101)FD/TAX/2011-59 Dated 13 August 2013 further Amended by Notification 3333 dated 09.03.2015 and last updated Notification for Amendment works Contract Exemption Fee is N.NO 3553 dated 08 March 2016.
Section 9 of RVAT Act deals with Bar against collection of tax when not payable i.e. Person not registered with Rajasthan Commercial Department under RVAT Act shall not collect any VAT from other person.
Section 10: Burden of proof i.e. its seller or purchasers liability to prove that particular Goods is not liable for VAT Tax.
Section 11 deals with Obligatory registration i.e. Who is required to register under VAT Every dealer liable to pay tax under sub–section (1) or (5) of section 3 shall get himself registered
Section 12 deal with Voluntary registration
Section 13: Authority competent to grant registration.
Section 14: Authorisation for collection of tax
Section 15 deals with Furnishing of security for registration. Security in the form of National Saving Certificate or in cash or in the form of three years bank guarantee of a nationalized bank of Rs 10,000/- for Small Scale Unit, Rs 15000/- for medium scale unit and Rs 25,000/- for Large Scale Unit (All for Manufacturing Concern). In case of Trading concern Rs 10,000/- and If Dealer is submitting initial security shall be in the form of surety of two dealers registered under this Act he is not required to submit bond or NSC. Dealer can give maximum surety of 4 concerns
Section 16: Amendment and cancellation of registration certificate Every change there are 2 type of change 1. Change in Basic structure of Dealer 2. No Change is Basic Structure if any change effect the basic structure then dealer have to take New VAT registration e.g. such as, conversion of a proprietary concern into partnership firm or vice versa, dissolution of an existing firm and creation of new firm, formation of a firm into a company or vice versa, a fresh certificate of registration shall be required to be obtained by the dealer, in all other cases dealer is required to update VAT registration with 30 days from the date of change like addition or deletion of branch or change in address of registered office or addition of partner or addition of deletion of commodity or change in Name of business etc.
Section 17: how to Calculate Amount of Tax payable by a dealer, Basic formula is
T = (O+R+P) – I
T is net tax payable;
O is amount of output tax;
R is amount of reverse tax;
P is the amount of tax payable under sub–section (2) of section 4; and
I is the amount of input tax.
Section 18: how to calculate Input Tax Credit, Input tax credit shall be allowed, to registered dealers on purchase of any taxable goods made within the State from a registered dealer for Sale but subject to conditions that where any goods purchased in the State are subsequently sold at subsidized price, the input tax allowable under this section in respect of such goods shall not exceed the output tax payable on such goods and no Input allowed for exempted goods.
Section 19: Input tax credit for stock on the date of commencement of this Act
Section 20: Payment of tax
Section 21 deals with Filing of return i.e. What are the different due dates for filling VAT returns under Rajasthan VAT and RVAT rules has provided the due date for RVAT return which are 45 days from the end of quarter for dealer who are liable to deposit tax on monthly basis i.e. Dealer liable to pay VAT of Rs 50,000/- for last financial year and 60 days from the end of the quarter for all the other VAT dealers.
Section 22: Assessment on failure to deposit tax or submit return or audit report
Section 23: Self Assessment means dealer will be assessed based on the return filled by him.
Section 24: Dealer will be assessed based on the material available on record in case assesee officer not satisfied with the record available he can issue notice to dealer and dealer can file return or revise return and assessing officer can assesee best of his judgement, No assessment order under this section shall be passed after the expiry of two years from the end of the relevant year but Commissioner can extended the period of assessment and last date for assessment for FY 2013-14 is 31st July 2016.
Section 25 deals with Assessment in case of avoidance or evasion of tax i.e. Dealer can be assessed for any period if assessee officer believes that dealer is trying evade tax but subject to condition that giving the dealer a reasonable opportunity of being heard. In case if tax is imposed under this section dealer has to deposit tax with 30 days of order.
Section 26: Escaped assessment means dealer escape the assessment due to non registration or under assessed.
Section 27: Audit of Dealer: Commissioner has reasons to believe that detail scrutiny of their business is necessary and No notice under sub–section (4) shall be issued after the expiry of five years, and no assessment under this section shall be made after the expiry of eight years, from the end of the relevant year.
Section 28: Assessment in case of a casual trader. Casual dealer will be assessed just after the transaction but no order or report can be made after the expiry of two years from the date of completion of the transaction.
Section 29: Assessment in special cases. – (1) Minor and incapacitated person then tax will be recovered from guardian or trustee.
Section 30: Assessment of a dissolved firm
Section 31: Rounding–off of tax, interest and penalty rounded off to the nearest multiple of ten rupees
Section 32: Want of form not to affect proceedings.–
Section 33: Rectification of a mistake.No rectification under this section shall be made after the expiry of four years from the date of the order sought to be rectified.
Section 34: Reopening of ex–parte assessment
Section 35: Stay of proceeding.– No civil court or any other authority shall stay assessment proceedings purported to be initiated or already initiated under this Act.
Section 36: Determination of disputed questions
Section 37: Transfer of cases. A dealer may make an application on plain paper to the Commissioner to transfer any case under this Act from one officer or authority to other officer or authority on the following grounds, namely:– (a) Dispute of jurisdiction; or (b) Apprehension of miscarriage of justice; or (c) Business convenience.
Section 38: Liability for payment of tax or demand
Section 39: Liability of a surety.– The liability of a surety under this Act shall be co–extensive to the extent of the amount of security with that of the defaulting dealer and all the modes of recovery enforceable against the dealer shall be simultaneously enforceable against the surety.
Section 40: Liability of the representatives of a deceased person.–Representative of deceased person has to apply for VAT registration within 30 days of Death.
Section 41: Liability on dissolution, discontinuance or partition of business.
Section 42: Liability on transfer of business.–In case of transfer of business then the remaining unpaid at the time of the transfer, shall be payable by the transferee.
Section 43: Liability of principal and agent. Both Agent and Principal are jointly and severally liable to pay tax.
Section 44: Liability of firms and partners. All the partners are liable under the Act for Tax.
Section 45: . Liability of Directors of a private company. Every person who was a director, at any time during the period for which the tax or other sums are due, shall be jointly and severally liable for the payment of such ta every person who was a director, at any time during the period for which the tax or other sums are due, shall be jointly and severally liable for the payment of such tax.
Section 46: Liability in case of amalgamation of companies
Section 47: Liability under this Act to be the first charge
Section 48: Certain transfers to be void.
Section 49: General mode of recovery. Any tax due shall be recoverable as an arrear of land revenue can be recovered by by attachment and sale of movable or immovable property of such dealer or person.
Section 50: Special mode of recovery. Tax can be recovered from any person from whom any amount is due or may become due to a dealer who has failed to pay due tax or other sum on demand by the assessing authority; or any person who holds or may subsequently hold any money for or on account of such dealer.
Section 51: Power to reduce or waive interest and penalty in certain cases.If Commissioner is satisfied the dealer is under financial hardship and not is position to pay demand can wiase penalty or interest or both but only after recording reasons in writing.
Section 51A: Power of State Government to waive penalty and interest in certain cases
Section 51B: Rebate of tax
Section 52: Power to write off demand.Writing off demand if its more than 10 year old and can’t be recovered as no property is available for attachment and demand has become irrecoverable.
Section 53: process of applying for refund
Section 54: Power to obtain security or withhold refund in certain cases.
Section 55: Interest on failure to pay tax or other sum payable.
Section 56: Penalty for not making application for registration is Rs 1000/-
Section 57: Penalty for failure to furnish security at the time of registration or additional security under section 15 then AO can impose penalty of Rs 2000/- and a further penalty of rupees twenty five for every day” till the requisite security or additional security is furnished.
Section 59: Penalty for not maintaining or keeping accounts “a sum not exceeding rupees five thousand and in case of continuing default a further penalty of rupees fifty for every day of such continuance.”
Section 60: Forfeiture and penalty for unauthorised collection of tax by unregistered dealer or excess collection by dealer then penalty in addition to tax collected will be a penalty equal to double the amount of tax which has been so collected by him.
Section 61: Penalty for avoidance or evasion of tax.–Penalty in addition to tax payable by him under this Act, a sum equal to two times the amount of tax avoided or evaded.
Section 62: Penalty for not furnishing statistics “shall pay by way of penalty, a sum not exceeding rupees one thousand
Section 63: . Penalty on awarders. Where an awarder of a works contract, fails to deduct the amount in lieu of tax from the bill of a contractor as prescribed, or after having deducted such amount from such bill does not deposit the same in the prescribed manner and time, he shall be liable to pay tax deducted by him and a penalty for each violation, “which may extend upto rupees one thousand in the case of non–deduction, and a penalty at the rate of two percent per month on the amount so deducted” but not deposited for the period during which such default continues.
Section 64: Penalty for other violations
Section 65: Opportunity before imposition of penalty.– No penalty under this Act shall be imposed unless a reasonable opportunity of being heard is afforded to the dealer or the person concerned.
Section 66: Time limit for imposition of penalty or levy of interest. No order for imposition of penalty after expiry of two years from the end of the year in which the relevant assessment or rectification order is passed.
Section 67: Prosecution for offence
Section 68: Composition of offences.
Section 69: Penalty or composition under this Act not to interfere with punishment under other law.
Section 70: Investigation of offence
Section 71: Accounts to be maintained by a dealer. Dealer should maintain record through which the value and quantity of the goods received, manufactured, sold or otherwise disposed of or held in stock by him can be calculated
Section 72: Registered dealers to issue VAT invoice.
Section 73: Audit of accounts. Every Dealer other than who opt for payment under section 3(2) or under section 5 or who efiles the VAT return. which makes Audit section irrelevant as all the dealers registered under Rajasthan VAT are required to e-file VAT return.
Section 74: Dealer to declare the name of his business manager in FORM VAT 02
Section 75: Power of entry, inspection and seizure of accounts and goods.
Section 76: Establishment of check–post or barrier and inspection of goods while in movement.
Section 77:Establishment of check–post on contract basis.
Section 78: Transit of goods by road through the State and issue of transit pass. shall make an order that notwithstanding anything contained in this Act, Where such owner, driver or person incharge fails to deliver such transit pass in respect of any goods such owner, driver or person incharge shall pay tax on such sale together with the penalty equal to double the amount of such tax. Transit Pass in FORM 47A. Rajasthan State Government has specified the list of Goods for which transit passed is required.Form VAT 47A can be generated online through Rajtax Portal.
Section 79: Import of goods into the State or export of goods outside the State.
Section 80: Liability to (“xxx”) furnish information by certain agent
Section 80A: Liability to furnish information by certain persons
Section 81: Special provisions relating to under–billing. where AO believes that goods are under valued then he may seized the goods and impose the addition amount tax and impose penalty equal such additional VAT tax.
Section 82: Appeal to the appellate authority. Appeal to be presented with 60 days of date of communication of such order.
Section 83: Appeal to the Tax Board
Section 84: Revision to the High Court
Section 85: Revision to the Commissioner
Section 86: No appeal or revision in certain cases. Dealer cannot file appeal or revision under section 82, 83,84 and section 85 for matter related to notice or summons issued for assessment, direction to maintain certain accounts or furnish certain information, statement, statistics or return; an order for impounding, seizure or retention of accounts, registers or documents etc.
Section 87: Persons appointed under this Act to be public servants
Section 88: Constitution of the Rajasthan Tax Board
Section 89: Indemnity.– No suit, prosecution or other legal proceeding shall lie against any officer or official of the State Government for anything which is done or intended to be done under this Act or the rules made thereunder in good faith.
Secion 90: Bar to proceedings except as provided in this Act.– No assessment made and no order passed by any officer appointed or authority constituted under this Act, shall be called into question, except as provided in this Act.
Section 91; General powers of the Commissioner
Section 92: Power to enforce evidence.
Section 93: Power to seek assistance from police officer or other officer.–
Section 94: Disclosure of information relating to a dealer.– (1) Where any information about the registration, returns and assessment or matters incidental thereto, of a dealer is required– (a) by a court in connection with any proceeding before it; or (b) by a police officer in connection with any investigation of a case; or (c) by any Government department for an
Section 95: Automation
Section 97: Court fees payable under this Act.– (1) Notwithstanding anything contained in any other law for the time being in force, all applications, appeals and other proceedings under this Act shall require court fee stamps of such value as may be prescribed. (2) The State Government shall be exempted from court fee leviable under this Act and the rules made there under. “
Section 97A: No refund etc. in case of retrospective exemption.In case any change giving retrospective exemption to dealer and he has collected VAT tax then has to deposit that sum with Rajasthan State Government and if already deposited no refund will be issued.
Section 97B: Delegation of powers.- The State Government may, by notification in the Official Gazette, direct that subject to such conditions, if any, as may be specified in the notification, any power exercisable by an assessing authority under this Act may be exercised by such officer of the State Government, as may be specified in the notification.”
Section 98: Power to remove difficulties. – (1) Where any difficulty arises in giving effect to the provisions of this Act, the State Government may, by notification make such orders not inconsistent with this Act, as may appear to be necessary or expedient for removing the difficulty. (2) No order under sub–section (1) shall be made after the expiration of three years from the date of commencement of this Act. (3) Every order made under sub–section (1) shall be laid before the House of the State Legislature.
Section 99: Power to make rules.–All rules made under this Act, shall be laid, for a period of not less than fourteen days which may be comprised in one session or in two successive sessions and if before the expiry of the sessions in which they are so laid or in the session immediately following the House of the State Legislature makes any modification in any of such rules or resolves that any such rules should not be made, such rules shall thereafter have effect only in such modified form or be of no effect, as the case may be, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done there under.
Section 100: Repeal and savings.
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