Amnesty Scheme for Builders under Haryana VAT released on 12th September 2016

The much awaited Amnesty Scheme under Haryana VAT has been released for builders and other work contractors on 12th September 2016, to be called as Haryana Alternative Tax Compliance Scheme for Contractors, 2016, vide Notification No.19/ST-1/H.A.6/2003/S.59A/2016- dated 12th September, 2016.

The principle features and scope of the said scheme as applicable on Builders, is outlined below:

1. Eligibility: The scheme is applicable to all contractors involved in construction of civil structures, flats etc. for sale, and transfers them in pursuance of an agreement alongwith land or interest underlying the land to a buyer, whether they have or have not opted for lump sum scheme under rule 49 of the Haryana Value Added Tax Rules, 2003.

   Meaning thereby, that the builders who has opted for Regular provisions for payment of VAT under Rule 25 as substituted vide Notification No. 19/ST-1/H.A.6/2003/S.60/2015, dated 23rd July, 2015 applicable with retrospective effect from 17-05-2010) are eligible to opt this Amnesty Scheme.

   However, the builders who already have opted for payment of VAT as per Rule 49A(inserted vide Notification No. S.O.88/H.A.6/2003/S.60/2014, dated 12th August, 2014 applicable from 01-04-2014 and amended vide Notification No. 23/H.A.6/2003/S.60/2015, dated 24th September, 2015, with retrospective effect from 01-04-2014), are not eligible to opt for amnesty scheme.

2. Time limit to opt for this scheme: The scheme can be opted within 90 days from the date of this notification.

3. Rate of VAT: A lump sum amount at the rate of 1% plus surcharge of 5% on the entire aggregate amount, received/receivable for the business carried out during the year, without deduction of any kind, will be payable i.e. 1.05% of aggregate amount.

   Aggregate amount means revenue recognized as per audited financial statements of the relevant financial year or valuable consideration, whichever is higher, in relation to business.
   

4. Scope: The builders who have once opted this scheme for the contracts entered/executed (partly of completely) shall be deemed to have been opted for upto the 31st March, 2014, and the builder shall be liable to pay the amount as per this Scheme for each year up to the end of the period (i.e. upto 31-03-2014) of the Scheme.

5. Form of Application: The builder who needs to opt this scheme, has to apply online in Form TC-1 to the concerned assessing authority, within the time limit as mentioned supra (i.e. 90 days). The Form-TC-1 is annexed in the said notification.

6. Payment of Liability: The builder needs to declare his year-wise liability due under this Scheme and shall pay first installment of 25% of the total amount due and payable before filing Form TC-1 under the Scheme.

   The Contractor shall furnish proof of payment thereof alongwith Form TC-1. Remaining 75% tax shall be payable in 3 installments each payable within 15 days of the end of the next quarter without interest.

   Consequences if instalments are not paid in due time:

   (i) Interest at the rate of 2%p.m. for the period of delay, but this period of delay shall stand restricted to three months only and the contractor shall fully discharge his liability alongwith interest within this period of three months.

   (ii) In the event of default in making the payment, the option and the benefit already availed under this Scheme shall be liable to be withdrawn and the amount already paid shall stand forfeited.

7. Restrictions:
   i) Where the builder has charged and collected tax from the buyers in any particular year and it exceeds the amount payable under this Scheme, then the amount of actual tax charged and collected during the year shall be the amount payable for that particular year under this Scheme.

   ii) No input tax credit on purchase of goods shall be admissible to the contractor under this Scheme.

   iii) The liability under this Scheme shall also be irrespective of the liability of the sub-contractor under the Act. Meaning thereby, no deduction for work done by subcontractor will be allowed to the builder, opting for this scheme.

   iv) If the tax, interest or penalty already paid by him during the year covered under this Scheme exceeds the lump sum amount payable as per point (i) above, the excess amount shall be adjusted in subsequent year.

   However, any excess amount left after such adjustments shall neither be refunded nor allowed to be adjusted against any other tax liability on the expiry of this Scheme.

8. Examination of Form TC-1: After filing of the application in form TC-1, examination of the application will be done by the committee of two senior ETO’S with concerned Assessing Authority and on their report Dy Excise and Taxation Commissioner shall pass an appropriate order in which the application can be accepted or rejected

9. Others:
   i) This Scheme shall apply irrespective of the fact that assessments are pending or have attained finality or assessment orders are pending before any authority under the Act or any court of law at the time of applying for the Scheme.

   ii) After the acceptance of the Form by the Deputy Excise and Taxation Commissioner, the builder shall, within fifteen days of the date of acceptance, make an application to withdraw all appeals, writ petitions and/or cases pending before any Authority or Court of Law.

Atul Kumar Gupta
B Com (Hons) FCA, FCMA, LLB, MIMA, CIQA, PGDEMM