Sales Tax Instructions

Sales Tax Instructions, 2009
1979 has very wide scope and the persons liable to registration under Sales Tax Law may
be a small proportion of those whose payments are being subjected to withholding tax
deductions thereunder.
2. Before sending out the notice, however, thorough scrutiny of the data of
such persons may be undertaken, comparing it with the existing registration database and
ensuring that the notice is not served on a person who is not liable to sales tax registration
or is already registered under the said law. The Collector may also keep in mind that:-
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Government departments/ public sector institutions / organizations are
not buying taxable goods from unregistered persons;
Suppliers of exempt goods are not liable to registration;
All ‗services‘ are not liable to sales tax, i.e. sales tax is not chargeable on
all categories of services;
The cases of contractors involved in construction or commissioning of
projects need to be handled carefully because in such cases if no supply
of taxable goods is involved, registration is not warranted;
Details about the persons having contracts with Government departments
and persons already registered under the Sales Tax Act, 1990 need to be
confirmed (particularly with reference to their business activity) from the
concerned departments /persons before deciding whether or not to
proceed for their registration;
Out of the data supplied by Income Tax department, there may be
persons who already hold NTN details about such persons‘ activity can
therefore, be taken from Income Tax department; and
There may also be a number of persons, who might have filled in and
deposited business survey forms. Details about such persons may be
taken from the survey data available with PRAL.
3. In short the collection and analysis of information should not create a
general scare, which will definitely occur unless handled carefully and efficiently.
Therefore, it has to be an in-house exercise without any formal contact with the
taxpayers. The exercise should not be left in loose hands and the Collector should himself
watch and monitor the execution and progress of this exercise and send monthly progress
reports to the Board quantifying the achievements in terms of increase in registrations
and revenue yields.
4. CBR may be apprised of the results, so that if necessary, similar action
may be taken in all the Collectorates.