COMPOSITION SCHEME

COMPOSITION SCHEME

Form for application of scheme

A brick kiln owner may at any time exercise his option to pay lump sum in lieu of tax in the following Form:

FORM OF APPLICATION

I........................................ (name), aged .........(years), son of Shri ......................... resident of village/t own ............ District .............. proprietor/partner/manager/managing director of M/s ........................................ holding TIN ............... owner of brick kiln situated at ..................... (Place), District ..............., do hereby opt to pay lump sum in lieu of tax payable under the Act with effect from the beginning of the quarter and declare that I, fall in category ..................... as specified in sub-rule (1) of rule 47 as the brick kiln is of the capacity of ...... number of ghori.

Place                                                                                Signature of brick kiln owner

Date  

General principles/ conditions of this scheme

• Lump sum tax payable shall be deemed to be tax for the purpose of application of provisions relating to assessment, use of declarations and maintenance of record relating thereto, levy of interest, imposition of penalties for offences committed under the Act, and recovery.
• Once an option to pay lump sum has been exercised it shall not be withdrawn until

1. the rate of lump sum is revised; or
2. the rate of tax on goods which the lump sum dealer deal in are revised

and the lump sum dealer makes an application within 15 days of the date of the publication of the notification that he does not wish to pay lump sum at the revised rate [exception under rule 49]

• A lump sum dealer shall not issue a tax invoice as defined in section 2(1) (zl).
• The input tax in respect of goods purchased by any dealer from a lump sum dealer shall be nil.
• Notwithstanding anything contained in this Chapter, the State Government may at any time withdraw the facility of making payment of lump sum in lieu of tax from anyone or more or all classes of dealers.
• No Surcharge under section 7A shall be applicable in this case.
• Goods and service tax brings the introduction of composition scheme that will curtail or control tax evasion.

Steps/ Conditions

• Brick kiln owner shall hand over this application to the appropriate assessing authority.
• This application shall be accepted, subject to the correctness of the information furnished in this application.
• Lump sum tax shall be payable for the whole of the month in which the application is so made.
• The brick kiln owner exercising the option shall have to do so in respect of all the brick kilns operated by him.
• A brick kiln owner liable to pay lump sum shall not purchase goods at lower rate of tax under section 7(2). However he may make purchase of goods on the authority of declaration(s) in Central form C. He shall disclose the use of these forms, at the time of applying for issue of declaration forms and in an annual return to be furnished in Form VAT-R8 within a month of the close of the year. He shall not be required to make use of declaration in Form VAT-D3 for carrying goods.
• Notwithstanding the operation of a brick kiln for a part of the year (ending 30th September), the owner thereof shall be liable to make payment of lump sum for the whole year.

Exception: An owner who opts for payment of lump sum for the first time shall be liable to pay lump sum from the beginning of the month in which he exercises his option and for the period before exercising the option for the first time, he shall be liable to pay tax under the usual provisions of law.

• The lump sum dealer shall inform of any increase in the capacity of the brick kiln, number of Bhatti, number or size of presses, as the case may be, to the appropriate assessing authority at least 10 days in advance of the completion of such change, failing which it shall be presumed in the absence of any evidence to the contrary that the change took place from the beginning of the year in which it came to the notice.

Inspection

The Commissioner or any person appointed to may inspect brick kilns of an owner liable to pay lump sum for the purpose of verification of capacity of the kiln, its status - whether being worked, fired or closed - and the stock of bricks at the kiln site in case it is closed.

Closure of Brick Kiln

• In case a brick kiln is intended to be closed for the next whole year beginning 1st October, the owner (who has opted lump sum scheme ) shall inform the appropriate Assessing Authority in writing at least 10 days before the closure but not after 1st October and declare the stock of bricks at the kiln.
• The brick kiln shall be placed in category D from the next year beginning 1st October only if the opening stock of all types of bricks at the kiln on that day does not exceed 5,00,000 bricks and the kiln is not fired throughout that year.
• In case of failure to furnish information about closure of a kiln in the above manner, it shall be presumed that the kiln has been functioning normally.

Payment of taxes

A lump sum dealer who is a brick kiln owner shall pay lump sum by

• Equal quarterly instalments payable in the first 45 days of the beginning of the quarter; or
• He may pay by equal monthly instalments payable on or before the 15th of each month

and shall furnish treasury receipt in respect of the payment made to the appropriate assessing authority within a week of the payment.

The amount of lump sum in their case shall not be pro rated for a period of less than a month and shall be computed on the higher side for the month in which any change in business effecting the lump sum liability takes place.

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