Sales Tax Instructions

Sales Tax Instructions, 2009
exceeds rupees one million per year have to get registered as sales tax payer. Those
having sales below the registration threshold have to get enrolled for payment of
Turnover Tax @ 4% of their sales (This should not be confused with any turnover tax for
purposes of income tax). However, the small manufacturers having sales of less than Rs.
300,000 per year will neither need to be enrolled nor have to pay any Turnover Tax.
5. What if I have more than one manufacturing premises: can I get a single
registration?
Yes. In routine, you get a single registration if you have more than one manufacturing
premises. However, you may apply for separate registration for different manufacturing
premises if you wish.
6. As a registered person, where am I required to keep my records?
You can keep the records at your manufacturing premises or at your registered office if
that is different from the place of manufacture. You have to indicated the place of
keeping your records in your application for registration.
7. Where should I file my monthly sales tax return ?
Your tax return has to be filed in any one of the designated branches of the bank in the
jurisdiction of the Collectorate where you are registered. In case of more than one
registration, the return has to be filed in the Collectorate of jurisdiction in each case.
ABOUT PENALTIES AND APPEALS
8. What is additional tax?
Additional tax is payable whenever any tax is not paid within the due date or whenever
an inadmissible tax credit or refund is obtained. It is payable on the amount not paid
within the due date or on the amount not admissible as tax credit refund.
9. How is additional tax calculated?
The rate of additional tax is 5 percent per month for the first 3 months and 2 percent per
month for any subsequent period. A part of any month is treated as a full month. The
liability of additional tax is calculated on the amount in default whether due to short
payment or inadmissible input credit or refund. The liability keeps increasing till the
liability as well as the additional tax are paid in full.
10. Are they any safeguards against misuse of provisions regarding tax fraud?
It is clarified that the provisions relating to tax fraud, arrest and prosecution will be used
strictly in accordance with the provisions of Law, in letter and spirit thereof. The senior
officers of the level of Assistant Collector and above will carefully watch any such
proceedings to ensure fair play and justice. These provisions will be invoked only if fully
warranted on merit. There will be no harassment to taxpayers whose mistake is bone fide
or in good faith. The very definition of tax ―tax fraud‖ in sales tax law provides that tax
fraud is the knowingly dishonest or fraudulent action or omission of understanding tax
liability or over standing entitlement of tax credit or tax refund for causing loss of tax.
You may also see the note on Advisory Committee at the end of this brochure.
ABOUT KEEPING RECORDS AND ACCOUNTS
11. I am already using a software package for maintaining my Sales Tax
Records; do I have to take permission from the Sales Tax Authorities for keeping it?
No. You do not have to take permission from the Sales Tax authorities for keeping the
software. It is clarified that the ―Special Note‘ at the end of brochure ―keeping Records
and Accounts‖ is not intended to discourage the use of computer for maintaining records.