8th floor, Vikrikar Bhavan,

Mazgaon, Mumbai 400010.

TRADE CIRCULAR

To

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No.VAT/MMB-1005/40/Adm3                                                                  Mumbai, dated 07.08.2007

Trade Circular No. 53 T of  2007 

                        Sub:   Calculation of vat liability on pro-rata basis .

Gentlemen / Sir / Madam,

1.                     Certain queries have been received by this office regarding difficulties faced by retailers and semi wholesalers who are selling both to retailers and householders. Due to peculiar nature of the business these dealers may not be in a position to identify sales (tax-rate wise) as the sales are in very small quantities and the number of cash memos is very large. However they are in a position to bifurcate the purchases into tax-rate wise slabs as purchases carrying 0%, 4%, and 12.5% rates. In the circumstances  they have sought  clarification  whether  the sales so effected  can be bifurcated  in different tax slabs  in the proportion  of the percentages of such tax slabs  on purchase side?

                        It is now clarified that the dealers are free to adopt the pro-rata method, based on classification of purchases as above if they undertake to follow it consistently without wavering. However the proposed method may be applied only where identification is impossible and the turnover of sales in the immediately previous year is less than Rs. 2 crore.

2.                     This circular cannot be made use for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.

3.                     You are requested to bring the contents of this circular to the notice of the members of your association.

                                                                          

Yours faithfully,

Sanjay Bhatia

Commissioner of Sales Tax,

Maharashtra, Mumbai.

No.VAT/MMB-1005/40/Adm3                                                                  Mumbai, dated 07.08.2007

Trade Circular No. 53 T of 2007 

 

Copy forwarded to:

a.   All the Addl. Commissioners of Sales Tax, in the State.

b.      All the Joint Commissioner of Sales , in the State.

c.       All the Sr. Dy. Commissioners of Sales Tax in the State.

d.      All the Dy. Commissioners of Sales Tax in the State.

e.       All. the Asstt. Commissioners of Sales Tax in the State.

f.        All the Sales Tax Officers in the State.

Copy forwarded with compliments  for information to:

  1. Deputy Secretary, Finance Department, Mantralaya, Mumbai.
  2. Under Secretary, Finance Department, Mantralaya,  Mumbai.
  3. The Accounts Officer, Sales Tax Revenue Audit, Mumbai and Nagpur.
  4. Copy to all Desks and Desk Officers in the office of the Commissioner of  Sales Tax, Maharashtra State, Mumbai .   

 

 

(Dilip Dixit)

Joint  Commissioner of Sales Tax,

(HQ)I, Maharashtra State, Mumbai