VAT will be introduced in Puducherry with effect from July 1, 2007. The Government of Puducherry (Union Territory) Law Department issued a gazette (extraordinary) NO: 22/Leg./2005-LD. Dt. 2nd June 2007. The gazette runs for about 111 pages containing the details of ‘The Puducherry Value Added Tax Ordinance, 2007’.

The main highlights

• Effective date 1st July 2007

• Existing Puducherry general sales tax registered dealers and persons who are going to do business in Puducherry after commencement of the VAT are liable to apply for registration.

• Turnover limit for registration – Rs 10 lakh.

• Dealer exclusively dealing in first schedule goods need not register under Puducherry VAT.

• All existing dealers will be provisionally registered under VAT and they need to file fresh application within one month from the date of commencement of this Ordinance for final registration.(i.e. before 2-7-2007)

• Registration fee –
  Rs 10,000 – Medium and large scale industries
  Rs 5,000 – Dealers in Indian Made Foreign Liquor
  Rs 100 – For others

• The above fee is for the first year and every year renewal need to be made by the dealers with specific fee

• For additional copy of certificate for each godown, factory, depot – Rs 100 to be paid by the dealer for each copy.

• Security deposit may be insisted for one half of the tax payable by the dealer in a year.

• Capital goods input tax – to be adjusted in three years in equal monthly instalments.

• Input tax credit will be allowed for opening stock purchased prior to 12 months from the date of commencement of the Ordinance.

• Dealers opting for compounded rate of tax not eligible for input tax credit.

• Returns to be filed within 15 days of each tax period along with the tax due thereon. It will be accepted as self-assessed.

• Every dealer exceeding the turnover of Rs 50 lakh shall get his accounts certified by chartered accountants or cost accountants and to submit the same to the assessing officer within prescribed time.

• Commodity list with six schedules released. Goods not specified in the schedules listed to 12.5 per cent rate.

• Industrial inputs covered under 4 per cent listed separately with excise code.

The VAT rules yet to be uploaded by the Commercial Taxes, Department, Puducherry.

Vinod Kuriakose

(The writer Vinod Kuriakose can be contacted at feedback2vinod@yahoo.co.uk)