CHAPTER – IX

CREDIT FOR TAX PAID ON STOCK ON HAND

AT THE COMMENCEMENT OF THE ACT

37.     Conditions for the Relief of Sales Tax at the Commencement of the Act.

          1        On the first day of the commencement of the Act, if a VAT dealer has in stock any goods on which sales tax has been paid under the Andhra Pradesh General Sales Tax Act, 1957, that VAT dealer shall be entitled to claim a credit of sales tax excluding turnover tax paid under the said Act for such goods which were purchased from 1st day of April 2004 to 31st day of March 2005.

          2        The conditions for claiming sales tax credit shall be,-          

                   (a)     the dealer claiming credit must be registered for VAT on the date of commencement of the Act;        

                   (b)     the claim for credit shall be on Form VAT 115;        

                   (c)     where the goods in stock are listed in Schedule I or Schedule VI to the Act,  no sales tax credit shall be allowed;      

                   (d)     the sales tax credit allowed shall be subject to the conditions in Rule 20;

                   (e)     a VAT dealer claiming sales tax credit shall make an inventory of all goods on hand on the date of commencement of the Act on which a sales tax credit is claimed within a period of seven days of the commencement of the Act ; 

          (f)      i)     where documentary evidence of sales tax charged is available, the sales tax charged shall be used as the basis for claiming the credit.  In case of goods specified in the Sixth  Schedule of  the  Andhra Pradesh General Sales Tax  Act, 1957, the tax paid on the value of the goods shall be arrived by applying the tax fraction, even though tax was not shown separately;

                   ii)    where the documentary evidence specified in clause(i) is not available, the amount that can be claimed as credit shall be based on ninety percent (90%)  of purchase value. The tax component which can be claimed as a credit shall be calculated by the use of the tax fraction to this value;

                   iii)   where any tax was paid on any goods at the point of purchase by the dealer himself, such tax actually paid shall be  eligible for sales tax credit;

                   (g)     where the goods in stock are listed in sub rule (2) of Rule 20, no sales tax credit shall be allowed except as provided for under the provisions of that rule;       

                   (h)     a claim for sales tax  credit shall  be submitted to the authority prescribed within ten days from the date of commencement of the Act. The Deputy Commissioner may, having regard to the circumstances permit the VAT dealer to make the claim after the said ten days but not later than thirty days from the date of commencement of the Act.  The approval of the claim for sales tax credit shall be issued on Form VAT 116 not later than ninety days from the date of commencement of the Act ;   

(i)            the VAT dealer shall keep all documents relating to the claim for credit for a period of four years from the date of commencement of the Act  and shall provide such documents to the authority prescribed for audit if required;    

            * Whenever a VAT dealer is liable to restrict his sales tax credit as per   the conditions in Rule 20, he shall submit Form VAT 200-G along with the return.  Wherever annual adjustment of sales tax credit is to be made, such VAT dealer shall submit Form VAT 200-H along with the return for March 2006.

*(Inserted by the GO MS No 2201 dt 29^th Dec 2005 w.e.f 1-12-2005)

3        when a claim under this Rule is approved on Form VAT 116 by the authority prescribed the amount certified as eligible for credit shall be claimed as a credit in six equal instalments.*(These shall be claimed monthly commencing on the return for August 2005 and ending on the return for January 2006.) These installments shall be claimed in the returns for the period from August,2005 to March,2006.

(* substituted by GO MS No 2201 dt 29^th Dec 2005 w.e.f 1-12-2005.)

          4        where any claim for sales tax credit is found to  be false either fully or partly, the authority prescribed shall reject the claim to the extent it is false and the excess claimed or approved shall be recovered by assessing the dealer under the provisions of the sub-rule (9) of Rule 25; 

          5        Where any VAT dealer executing any works contract claimed sales tax relief on closing stock as on 31.03.2005, and such goods are used in the works contracts for which composition is opted after 01.04.2005, such VAT dealer shall declare the value of the closing stocks as output value and the sales tax claimed as output tax in the tax period in which composition is opted for such specific contract.

          6        Where any VAT dealer opting to pay tax under sub – section (9) of Section 4 claimed sales tax relief on closing stock as on 31.03.2005, and such goods are used in the business for which composition is opted after 01.04.2005, such VAT dealer shall declare the value of the closing stocks as output value and the sales tax claimed as output tax in the tax period in which composition is opted for such specific business.