AP REORGANISATION ACT, 2014 – COMMERCIAL TAX ISSUES - FAQ
AT THE MEETING WITH
REPRESENTATIVES OF TRADE AND INDUSTRY ON 24/04/2014 at Hyderabad, Organised by
FAPCCI
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Sl.
No
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Query
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Response
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1
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To
consider the existing industries in both the States for providing industrial
incentives, while providing for new industries, which are going to set up in
Seemandhra State or Telangana State
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A.P.
Reorganisation Act, 2014 is not specifying what are the incentives proposed
under the so called special packages and if so, from what date such
incentives will be applicable and it is not also specific, whether they cover
only new industries and expansion units set up on or after 02/06/2014. As and
when guidelines are formed, there will be clarity.
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2
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Previously
way bill is not required within the State for manufacturers. It is difficult to transfer the goods to godowns. Is there any possibility to exempt. Is
waybill is required for job work.
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For any
movement of goods from one place to another place, whether belonging to the
dealer like factory to godown, branch etc. , or from a dealer to another
dealer(unless the goods themselves are exempt), a valid waybill (either
physical or e-waybill) shall accompany the goods under transit. Whether to exempt usage of waybills is a
policy decision, which has to be addressed to the new Governments after
02/06/2014. Even for job works, usage of waybill is required.
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3
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What about
input credit of invoices received after 15th June, but material
before the end of June with old TIN No. How to take Input Credit.
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Purchase
of goods before 02/06/2014 would be with old TIN. When goods are received on or after
02/06/2014, no input tax credit will be allowed with old TIN, as such old
TINs does not exist on or after 02/06/2014.
The dealers have to think of business solutions instead of legal
solutions.
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4
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If the supplier
sent material on or before 02nd June, but material arrives after
02nd June on CST. How to
account it.
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It should
be accounted for as CST purchases, if it is received on or after 02/06/2014,
with old TIN, and the same are to be accounted for with new TIN, without
ITC.
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5
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Revised
Returns pending for approval may change credit carry forward figure. Will
Dept. clear all revised returns pending for approval to determine correct
credit carry forward before 2nd June 2014 or what would be the
status of pending returns.
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The data
of returns for the period upto 01/06/2014 is proposed to be frozen and within a period of 6 months from
the end of the tax period, a revised return may be filed by the dealers,
using old TIN; and necessary changes in ITC have to be dealt with according
to revised return by the concerned assessing authority, under whose
jurisdiction the assessee comes under.
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6
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If the
dealer having TIN in Telangana, in future if he wants to do the business in
A.P., now only he has to OPT or he can register later in A..P
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At any
time the said dealer can apply for new registration in the State of Andhra
Pradesh. The present online option is
only an additional facility to the dealers.
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7
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How to
issue the “C” Forms for Quarter –I (April to June) as the TIN will going to
change from 2nd June.
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Dealers
for the purchases made on interstate basis from 01/04/2014 to 01/06/2014 may
issue “C” Forms for the said purchases, treating the said period as one
quarter, as there is no stipulation that only one “C” Form has to be issued
for all the purchases from a single seller during a quarter. What all CST Rules stipulate is a single
“C” Form may cover purchases made in a quarter.
For CST
purchases of goods from 02/06/2014 to 30/06/2014, separate “C” Forms may be
issued.
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8
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If the
dealer A (in Telangana) purchases goods from dealer B (in A.P) on 30/05/2014.
Dealer A receives the goods on 03/06/2014 and recorded in books of accounts
on 03/06/2014. Can dealer A avail ITC,
since the dealer B has raised VAT tax invoice.
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The dealer
B in the State of Andhra Pradesh sold goods on 30/05/2014 admittedly. This implies that the tax invoice is with
old TIN. Even if the goods are
received on 03/06/2014 in the State of Telangana, whether with old TIN or new
TIN of the A.P dealer, no ITC is eligible for the Telangana buyer, because
(a) if invoice is received with old TIN by 01/06/2014, but goods are received
after 02/06/2014, no ITC is admissible and (b) even if invoice with new TIN
and goods are received on or after 02/06/2014, based on A.P. State TIN tax
invoice, no ITC is admissible in the State of Telangana, as purchases of
goods from 02/06/2014 will amount to interstate purchases by the Telangana
dealer.
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9
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1.
When new
log in (if any) will be given for way bill generation.
2.
How to
deal with physical waybill lying in stock on 1st June
3.
Will Dept.
issue physical way bills with new TIN
number in advance before 1st June. How the limit will be
fixed.
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10
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You have
set up direct link with Trade and ruled out Consultant. How about new opportunity in Both States, post
bifurcation.
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It all
depends upon the professional acumen of the consultants / STPs / Advocates /
Chartered Accountants etc. The C.T.
Department is taking the initiative of educating the dealers on the likely
concerns of them due to State bifurcation.
The Department, by doing so, is not replacing or encouraging doing
away with the role of any of the above category of consultants by the
dealers.
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11
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Whether
movement of goods from Hyderabad (common capital) to Andhra be regarded as “local
sales” in State of Andhra?
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Common
capital at Hyderabad for the State of Telangana and for the State of Andhra
Pradesh is only an administrative setup for convenience of Governance. Any movement of goods from Hyderabad to any
place in the State of Andhra Pradesh will be treated as interstate movement
and dealt with as per the provisions of the CST Act, 1956.
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12
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How can the
dealers identify or know the assessing officer of principal place of business
of new States
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Depending
upon the physical location of the principle place of business of the dealers
(either in the State of A.P or in the State of Telangana), any dealer can
tentatively know, in which assessing authority jurisdiction their place of
business comes. However, they may take
assistance from the CTD portal, where the tentative jurisdiction of Circles,
Divisions is finding place. If any difficulty arises, they may take up the
matter with the C.T. Department by sending e-mail to reorganisationcell@apct.gov.in
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13
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What will
be status of CST registration
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A new CST
registration certificate will be dispatched to the dealers registered under
the CST Act from 02/06/2014 onwards and the existing CST dealers also will
get new CST registration certificates with new TINs.
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14
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Composition
– Form VAT 250 - to be filed afresh for existing works if they are located in
new State.(now)
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If the
works contractor has already filed Form 250, exercising option to pay taxes
under composition for any work, the same will be valid even in the new State
depending upon the physical location of the work.
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15
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After the
change of TIN number do we have to change the tax invoice serial number or
continue the same existing series?
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By
changing the old TIN with new TIN for the transactions on and after
02/06/2014, the old invoices may be used, not only to prevent existing
printed stationery, but for industries / manufacturers, continuity of invoice
serial numbers is required under Central Excise Laws. However, for the purpose
of demarcating the serial numbers of invoices upto 01/06/2014 and from
02/06/2014, a new suffix or prefix after the invoice number may be added from
02/06/2014.
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16
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Modification
of registration details should be done before exercise of option by using
radio button or after that?
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If any
dealer has already exercised option, they may request any further changes by
sending e-mail to reorganisationcell@apct.gov.in,
mentioning the TIN on or before 07/05/2014 (cut off date)
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17
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If we
select the option for both States what will be the applicable tax to us, as we are manufacturing goods in Telangana
and selling goods in AP and Telangana
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If the
manufacture is in Telangana, sale of any goods from Telangana to any dealer
in Telangana will be treated as local sales.
Any sale of such manufactured goods to any other dealer in Andhra
Pradesh will be treated as interstate sale and liable to be dealt under CST
Act, 1956. Any stock transfer of goods
from Telangana to the same dealers’ branch / godown / principal place of
business (AP State TIN) will amount to interstate stock transfers, therefore subject
to ITC reduction in the State of Telangana, and if such stocks are sold in
the State of A.P., then the said local sales in the State of A.P will be
liable to local VAT without ITC.
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18
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19
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We select
Telangana and get Ack. also but we have branches in “Machilipatnam”
“Visakhapatnam” (in old registration, no branches (or) godowns registered)
any solution?
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Even if
online option is exercised for adding branches, godowns to the existing TIN
(if the old TIN does not have the details of branches, godowns), the online
option is only a facility to the dealer, but the dealer is required to file
VAT 112 within 14 days to its registering authority as per Rule 13 of APVAT
Rules, 2005. Statutory provisions cannot be given a goby by an online option.
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20
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21
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22
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23
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1.
Being Hyderabad
is common capital, can we have two TIN Nos. for Telangana and AP with
Hyderabad address.
2.
Which TIN
No. to be included in C/F Forms for
previous year purchases and for pending assessments
3.
What about
Input Tax Credit if the purchase invoices are with old TIN Nos from the
vendors.
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24
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Can I
change the option after exercising it?
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You can change
your option upto 07.05.2014. Edit option for Online State option form is
available in dealer login.
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25
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Shall we
give Hyderabad address for both state TIN Nos as a common capital
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Hyderabad
is the common capital only for administrative purpose. Therefore, only for business transactions
in the State of Telangana a new TIN may be requested / allotted, if the
principal place of business is in Hyderabad area, but not for business
transactions in the State of Andhra Pradesh.
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26
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Hyderabad
and Rangareddy Districts will come under the territorial jurisdiction of
Telangana; on and from 02/06/2014.
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27
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28
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It is very
expensive to open new office in AP that too without knowing new capital. Hence request to allot 2 TIN Nos with one
address for at least 2-3 years
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It is not
permissible to obtain / issue 2 TINs with the same principal place of
business declared in the State of Telangana, applicable to both the States of
Telangana and Andhra Pradesh. For the
business transactions in the State of
Andhra Pradesh, such dealer has to identify and declare a principal place of
business along with proof of address and request new TIN in the State of
Andhra Pradesh, by online option on or before 07/05/2014.
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29
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We have
under deferment of VAT /Tax. Can we
pay online or we should pay by cheque only
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Depending
upon the convenience, and based on the physical location of the industrial
unit to which deferment of tax was availed, the said dealer shall pay the
arrears by online payment and in case such online option is not possible,
then by cheque to the concerned assessing authority.
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30
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As
password is shared with our branches and godowns, someone has exercised the
option without giving opportunity to the Head office. Now we want to change and how?
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It is the lookout of the dealer to protect the
password and if any of the branches or godowns have exercised online option
without the knowledge of the head office, then there is something wrong with
the supervisory administration by the head office of the dealer. However, after exercising the online option
once, you can exercise Revised option online in your login upto 07.05.2014.
Please go through the help file at www.apct.gov.in -> State reorganization information – Help.
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31
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What about
existing VAT carry forward amount.
Revised return not changing after verification of CTO
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Your returns in the new State start with zero ITC
w.e.f. 02.06.2014. Then after you can get ITC as per your Returns with new
TIN. But decision is yet to be taken in case of ITC belonging to composite
State whose TIN starts with 28. Whether to refund the same or carry forward
it is not yet decided.
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32
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The firm
is a new unit and eligible for sales tax benefit. State Level Committee approved first six
months incentive but amount not released.
What will happen for sanctioned and undistributed amount? What about
the next 4 ½ years sales tax incentive?
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The dealer
is requested to approach the Industries & Commerce Department, which is
the nodal State Government Department to sanction and release tax
reimbursements.
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33
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Advisable
to include (i) status of dealer, (ii) business details in short, (iii)
commodities registered under Sec. 8(3) of CST Act, (iv) branches locations in
the State, in the new TIN certificates, which are not available in old TIN
certificates.
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In the revised online State option form the
modification provisions are given to the dealer to the extent possible.
Please go through the helpfile at www.apct.gov.in -> State reorganization information -> help. You can exercise
revised option upto 07.05.2014.
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34
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We have
registered office in Telangana and we have some branches in Andhra
Pradesh. By mistake, we have selected
in option form. How can we modify the
form for both the States.
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Edit option is available in dealer login. Please
file revised online State option form. It will be available upto 07.05.2014.
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35
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Composite
State. Input, refunds, appeals
etc. (Inputs qualify for refund across
districts of composite State)
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For the
tax periods on and upto 01/06/2014 (transactions under the composite State of
A.P) all issues relating to ITC, refunds will be dealt by the concerned assessing
authority and appeals will be dealt by the concerned appellate authority.
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36
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Sales made
from composite State and sales returns after 2nd June. What happens to tax paid?
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Such
dealer may file revised return within 6 months from the end of the tax period
for which revised return is being filed and deal with excess / short payment
of tax as per notice / advice issued by the assessing authority.
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37
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Bifurcation
panel carry forward of VAT input credit balance as on 1st June,
2014.
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In new States dealer’s return start with zero ITC.
After 02.06.2014 you can get ITC as
per your Returns with new TIN. But decision is yet to be taken in case of ITC
belonging to composite State whose TIN starts with 28. Whether to refund the
same or carry forward it is not yet decided.
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38
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39
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Supply
against purchase order issued by AP Eastern Power Distribution Company as
Basic Price + VAT @ 5 extra. Supplies start from May and continue till
July. How do we supply? What rate of tax applicable?
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Eastern
Power Distribution Company would come under the territorial jurisdiction of
the State of Andhra Pradesh. If the
supplying dealer is in Telangana State, for supplies with old TIN upto
01/06/2014, basic price + VAT @ 5% will apply (Entry 116 of Schedule IV of
the APVAT Act); and for supplies on and from 02/06/2014 with new TIN, CST @
2% subject to production of “C” Forms issued by the Eastern Power
Distribution Company will apply. If required, such Telangana dealer may seek
an amendment to the supply order by the Eastern Power Distribution Company.
If the
supplying dealer is in the State of Andhra Pradesh, for supplies with old TIN
upto 01/06/2014, basic price + VAT @ 5% will apply; and for supplies on and
from 02/06/2014 with new TIN also, basic price + VAT @ 5% will apply (Entry
116 of Schedule IV of the APVAT Act).
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40
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We are
into hiring of generators. We do
business in Telangana & Andhra.
The D.G. Sets goes to Andhra from Hyderabad and comes back. What would be the tax complication at
Andhra & Telangana.
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The
taxable lease transactions will be liable to tax at appropriate rate based on
the “place of agreement” between the lessee and lessor irrespective of the
place where the leased goods are actually used, because the levy is on the “transfer
of right to use the goods”, but not on the transfer of goods. So, if the
lease agreement was signed in a place in the State of Telangana, even if the lease
of goods is in the State of Andhra Pradesh, tax will be levied in the State
of Telangana (and vice versa).
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