19 August, 2014

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Haryana VAT Composition Scheme for Builders & Works Contractors–Notification

By CA Ankit Gulgulia (Jain)

B.COM(H), CA, CIFRS, CBV, LLB*

+91-9811653975

HARYANA GOVERNMENT

EXCISE AND TAXATION DEPARTMENT

NOTIFICATION

The 12th August, 2014

No. S.O.88/H.A. 6/2003/S. 60/2014.- In exercise of the powers conferred by sub-section (1) of section 60 of the Haryana Value Added Tax Act, 2003 (6 of 2003) and with reference to Haryana Government, Excise and Taxation Department, notification No. Web. 6/H.A. 6/2003/S. 60/2014, dated the 5th July, 2014, the Governor of Haryana hereby makes the following rules further to amend the Haryana Value Added Tax Rules, 2003, namely :-

1. These rules may be called the Haryana Value Added Tax (Third amendment) Rules, 2014.

2. In the Haryana Value Added Tax Rules, 2003 (hereinafter called the said rules), in rule 2, in sub-rule(1),after clause (mmm), the following clause shall be inserted and shall be deemed to have been inserted with effect from 1st April, 2014, namely:-

“(mmmm) ‘developer’ means a person who is engaged in and undertakes the construction of civil structures, flats, dwelling units, buildings, premises, complexes, commercial or otherwise, whether wholly or partly (either himself or through an authorized person) for sale and transfers them in pursuance of an agreement along with land or interest underlying the land to a buyer, where the value of land or interest underlying the land is included in the total consideration received or receivable;”

3. In the said rules, for rule 49, the following rule shall be substituted and shall be substituted with effect from the date of publication of this notification in the Official Gazette, namely:-

“49 LUMPSUM SCHEME IN RESPECT OF CONTRACTORS OTHER THAN DEVELOPER (section 9)

(1) A contractor other than developer falling under rule 49A liable to pay tax under the Act, may, in respect of works contract awarded to him for execution in the State, pay in lieu of tax payable by him under the Act on the transfer of property (whether as goods or in some other form) involved in the execution of the contract, a lump sum calculated at five per cent of the total valuable consideration receivable for the execution of the
contract, by making an application to the appropriate assessing authority within thirty days of the award of the contract to him, containing the following particulars:

(1) Name of the applicant contractor;

(2) TIN;

(Append application for registration, if not registered or not applied for registration);

(3) Name of the contractee;

(4) Date of award of the contract;

(5) Place of execution of the contract;

(6) Total cost of the contract;

(7) Period of execution; and

(8) A copy of the contract or such part thereof as relates to total cost and payments.

(2) The application shall be signed by a person authorised to make an application for registration. On receipt of the application, the assessing authority shall, after satisfying itself that the contents of the application are correct, allow the same and such contractor whose application is allowed shall be called lump sum contractor.

(3) The lump sum contractor shall be liable to make payment of lump sum monthly calculated at five per cent of the payments received or receivable by him during the month for execution of the contract. The payment of lump sum so calculated shall be made within twenty one days following the close of the month after deducting therefrom the amount paid by the contractee on behalf of the contractor under section 24 for that month. The treasury receipt in proof of payment made and certificate(s) of tax deduction and payment obtained from the contractee shall be furnished with the quarterly return.

(4) The lump sum contractor shall file returns at quarterly intervals in Form VAT-R6 within a month of the close of the quarter and shall pay lump sum, if any, due from him according to such return after adjusting the amount paid under sub rule (3).

(5) The lump sum contractor shall be entitled to make purchase of goods for use in execution of the contract both on the authority of declaration in Central form C as well as Form VAT-D1 prescribed under clause (a) of sub-section (3) of section 7 and for this purpose he shall be deemed to be a manufacturer.

(6) The lump sum contractor shall maintain complete account of, declarations in Central form C and Form VAT-D1 used by him and, the utilization of the goods purchased on the authority of these forms. He shall also keep complete account of, payments receivable by him for the execution of the contract and, the payments actually
received by him.

(7) A lump sum contractor shall have to pay lump sum in respect of every works contract awarded to him after the award of the contract in respect of which he first elected to pay lump sum and he shall continue to pay tax in respect of contracts awarded before as if he is not a lump sum contractor.

(8) A lump sum contractor may at any time by appearing before the appropriate assessing authority himself or through an authorised agent express in writing his intention to opt out of the scheme of payment of lump sum in lieu of tax payable under the Act. Such contractor in respect of the contracts awarded to him thereafter shall not be liable to pay lump sum in lieu of tax payable under the Act but in respect of the other contract(s)
he shall continue to pay lump sum in lieu of tax payable under the Act till the completion of each of such contract(s).

(9) A lump sum contractor may, when rate of lump sum is revised, opt out of the scheme of payment of lump sum in lieu of tax payable under the Act by appearing before the appropriate assessing authority himself or through an authorised agent within fifteen days of such revision and expressing in writing his intention to opt out of the scheme of payment of lump sum. Such contractor shall be liable to pay lump sum for the period
before the revision in lump sum rate at the un-revised rate and in respect of transfer of property in any goods, whether as goods or in some other form, involved in the execution of the contract(s) thereafter he shall be liable to pay tax as a contractor not being a lump sum contractor.

(10) A lump sum contractor shall be eligible to claim set off of TDS only if on the date of filing of return, he is in possession of original TDS Certificate issued to him by the person making the deductions.

(11) The Excise and Taxation Commissioner shall be competent to issue the detailed guidelines, specifying the procedure and the forms etc for the purpose of availing, compliance and monitoring of the above scheme.”;

4. In the the said rules, after rule 49, the following rule shall be inserted and shall be deemed to have been inserted with effect from Ist April, 2014, namely:-

“49-A LUMPSUM COMPOSITION SCHEME IN RESPECT OF DEVELOPERS (Section 9).-

(1) A developer liable to pay tax under the Act, and duly registered may pay, as an option, in lieu of tax payable by him under the Act, by way of composition a lump sum tax calculated at the compounded lump sum rate of one percent of entire aggregate amount specified in the agreement or value specified for the purpose of stamp duty, whichever is higher, in respect of the said agreement. The Developer opting for this scheme here-in-after shall be referred to as the composition developer.

(2) The composition developer opting for composition under this scheme shall,-

(i) not purchase or receive goods from any place outside Haryana to be used in the execution of the contract at any time during the period for which the composition remains in force under this Scheme:

Provided that if the goods purchased or received in the course of inter-state trade and commerce or transferred from other states or imported from out of India have been used in the execution of the contract, then the composition developer shall pay the tax on their purchase price at the rate/s applicable on the
sale of such goods in the State along with interest as applicable under the Act and such tax shall not be adjustable towards his composition tax liability;

(ii) be treated as non-vat dealer and not eligible to claim input tax credit under section 8 of the Act;

(iii) not collect any amount by way of tax under the Act;

(iv) not issue „ Tax Invoices ‟;

(v) retain the originals of all tax invoices and all the retail invoices for all his purchases;

(vi) not be entitled for any refund.

(3) The tax period for the composition developer shall be monthly and the payment of lump sum in lieu of tax shall be paid by the composition developer within 15 days of the close of the month:

Provided that if a composition developer fails to make the payment of tax in time under this scheme, then he shall be liable to pay interest as per the provision of sub-section (6) of section 14 of the Act.

(4) Where the composition developer awards any portion of his contract to a contractor or sub-contractor, such composition developer shall not be eligible for any deduction on account of any tax paid by the contractor or the sub contractor under the Act.

(5) A registered developer who is paying tax or composition tax under the Haryana Value Added Tax Act, 2003 on the date of this notification, may opt this scheme with effect from Ist April, 2014 by filing an application to the appropriate assessing authority within a period of thirty days from the date of publication of the notification.

(6) The developer applying for a fresh registration under the Haryana Value Added Tax Act, 2003, may opt for this scheme by filing an application along with registration application.

(7) The Excise and Taxation Commissioner shall be competent to issue the detailed guidelines, specify procedure and the forms etc for the purpose of availing, compliance and monitoring of the above scheme.

(8) For the removal of doubts, it is hereby declared that nothing contained here-in-above shall be construed as conferring any benefit, concession or immunity on the composition dealer other than the benefit, concession or immunity granted under the above scheme.”.


Hardeep Kumar,

Additional Chief Secretary to Government,
Haryana, Excise and Taxation Department

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