Benefit Sales Tax

AGARWAL SHRAFF & CO CHARTERED ACCOUNTANTS

153/5 A.P.C.Road Calcutta- 700 006 Phone- No. – 555 8820 e-mail – shraff @ cal2.vsnl.net.in Mobile- 98300 70510 ( Vinay) 98300 96097 ( Sanjay)

Benefits of exemtions, deferment or remission under Sales Tax Laws Benefits of exemtions, deferment or remission withdrawn with effect from 1st January,2000 The incentives offered under provisions of Sections 39, 40, 41, 42 & 43 of the West Bengal Sales Tax Act, 1994 by way of exemptions to the newly set up small scale industrial units or deferment of payment or remission of tax to the large or medium sized industrial units or their expanded portions or to the sick industrial units, have been withdrawn with effect from the 1st January,2000, vide Trade Circular No. 4/1999. However units already enjoying any of the aforesaid benefit, will be entitled to enjoy the same provided they do not contravene any of the provisions which were in vogue till 31st day of December, 1999. Relaxation for units, already taken steps to establish the units A) For availing of benefit of exemption for SSI units SSI units which are registered with Directorate of Cottage & Small Scale Industries, West Bengal on or before the 31st December, 1999 and who will start production for the first time on or before 30th June, 2000 will be eligible to apply for and avail the benefit of exemtion even after 31st December, 1999. B) For availing of benefit of Deferment of Payment / Remission of tax for Large and medium units Newly setup Large and Medium sized units or expanded portion of existing industrial units which are registered under the West Bengal Incentive Scheme, 1993 or the West Bengal Incentive Scheme, 1999 and who will start production for the first time within Two years from the 1st January, 2000 will be entitled to apply and avail the benefit of Deferment / Remission even after 31st December, 1999. C) For availing of benefit of Deferment of Payment / Remission of tax for Sick or Closed Industrial units A sick or closed unit for which any scheme relating to revival or rehalitation has been sanctioned by the BIFR on any date upto 31st December, 1999 will be eligible for Deferment / Remission as the case may be.

Provisions governing Tax Holiday for new small scale industrial units Section 39 of West Bengal Sales Tax Act, 1994 and Rule 55, 98, 99, 100, 101 of The West Bengal Sales Tax Rules, 1995 governs the provisions regarding exemption from Sales tax by newly setup small scale industrial units. A registered dealer shall not be eligible for exemtion from payment of tax under section 39 if he once opts for deferment of payment of tax or remission of tax under section 40, section 41, section 42 or section 43 as the case may be, in respect of sale of such industrial goods manufactured in such industrial unit. Definition of “newly setup small scale industrial unit” It shall mean an industrial unit – i) in which the amount of investment on plant and machinery including the value of those obtained on hire, lease, rent or loan, but excluding the value of land, building and cost of generator and moulds does not exceed thirty five lakh, it shall also include pollution control equipment required under ii) Which is registered with the Directorate of Cottage and Small Scale Industries, Government of West Bengal; iii) Which is established solely or substantially with plant or machinery, other than the plant or machinery used by another newly set up small scale industrial unit which has earlier availed of the benefit of exemption from tax under this rule or under any other rules in this behalf made under any of the Repealed 1) The Bengal Finance (Sales Tax) Act, 1941, 2) The Bengal Raw Jute Taxation Act, 1941, 3) The West Bengal Sales Tax Act, 1954, 4) The West Bengal Motor Spirit Sales Tax Act, 1974. Conditions and restrictions for exemption He shall obtain and possess a valid certificate of eligibility. Sale bill or cash memo in respect of purchase of plant and machinery, or any document of like nature where such plant and machinery are taken on hire, lease, rent or loan. c) Separate set of serially numbered sale bills or cash memos in respect of sales of the goods manufacture in the his unit where such dealer makes sale of goods other those manufactured in his unit. d) Stock register showing records of production of goods in his unit and issue of such goods by way of sale or otherwise. a) b)

Period of Tax Holiday The benefit of exemption will be available for 5 years from the date of his first sale of he goods manufactured in his newly set up small scale industrial unit, if such unit is situated within the area of the Calcutta Metropolitan Planning Area as described in the First Schedule to the West Bengal Town and Country ( Planning and Development) Act, 1979 or for seven years from the date of first sale of the goods manufactured in his newly set up small- scale industrial unit, if such unit is situated elsewhere in West –Bengal. However in case pollution abatement measures are adopted he is eligible for benefit of tax exemtion for a further extended period of one year or less subject to a limit of five percent of actual investment for the purpose of adopting such pollution abatement measure. Manner of application for certificate of eligibilty A dealer should apply in Form 17, to Deputy Commissioner or Assistant Commissioner, as the Commissioner may, by an order in writing, authorise in this behalf, within 30 days of certificate of registration granted to him provided any delay may be condoned for reasonable cause being shown.

He will be granted a certificate of eligibilty in form 18 if the authority to whom application is made is satisfied in all respect. His application may be rejected for reasons to be recorded in wirting after giving reasonable opportunity of being heard.