Amendment made in HP Vat act by Act No 10 of 2016

By | June 12, 2016
(Last Updated On: June 12, 2016)

Amendments made to the Himachal Pradesh Value Added Tax Act, 2005

Effective Date: 26th May, 2016

The Himachal Pradesh Bill No. 7 of 2016 have received the assent of the Governor on 26th May 2016 and therefore, the following amendment will take effect accordingly:

Section 11 (Input Tax Credit)

Situation where dealer-

Earlier Penalty

New Proposed

Falsely claims ITC in his returns

Twice of such claim or credit

Amount equal to such claim or credit

Claims incorrect ITC in the return

50% of such claim or credit

25% of such claim or credit

Section 14A (Application for grant of Provisional Registration Certificate) has been inserted which provides that:

  • Any person can apply for registration by online application along with scanned copies of the prescribed documents.

  • The Provisional Registration Certificate (RC) shall be granted within 3 working days of receipt of application.

  • Afterwards, the applicant may be directed to produce evidence and documents and also the accounts relating to the business for verification. On being satisfied, the prescribed authority shall issue a Permanent RC within 30 days from the date of receipt of application.

  • However, prescribed authority may reject the application & cancel the Provisional RCwithin 30 days of receipt of application if it is satisfied that the particulars given are incorrect or that the applicant has misrepresented certain facts only after giving an opportunity of being heard to the applicant.

Section 16 (Payment of tax and returns)


Earlier penalty when annual tax liability is more than Rs. 20 lakhs

New Penalty

Failure / delay to file monthly returns

Rs. 1,000 per day

Rs. 1,000 per day subject to maximum of Rs. 50,000

Further, where a dealer has closed down his business or has left the business without getting his RC cancelled then the Assessing Authority shall suspend the RC immediately and thereafter no further incremental penalty shall be imposed.

Section 27A (Special provision for settlement of pendency and arrears) has been inserted, which provides a Settlement Scheme for cases of a particular period where the dealer could not submit the statutory forms required for assessment. The Scheme will allow for waiver of the tax amount, interest and penalty.

Section 49A (Advance Ruling) has been inserted, which provides that:

  • An ‘Advance Ruling Authority (ARA)’ is constituted to clarify the rate of tax or the eligibility to tax of any transaction or eligibility of deduction of input tax or liability of deduction of tax at source.

  • Any registered dealer can make an application accompanied by proof of fee payment.

  • The Authority after examining may either admit or reject the application. Further, the application shall not be accepted where the question raised:

-is already pending or

-relates to a transaction which is designed apparently for the avoidance of tax.

Moreover, no application shall be rejected unless an opportunity of being heard is given and reasons for such rejection shall be recorded in the order.

  • The order shall be passed within 90 days of the receipt of application. A copy of every order shall be sent to the applicant and the officer concerned.

[Act No. 10 of 2016]

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