Introduction

GOVERNMENT OF TAMIL NADU
COMMERCIAL TAXES DEPARTMENT

The Commercial Taxes Department is proud to declare that in the financial year 2005-2006 it has collected a revenue of Rs.16615 crores and above which has been realised from the mercantile public with their co-operation. The department is also duty bound to assist the mercantile public to understand the departmental procedure as a step towards clean and speedy and transparent administration.

The Commercial Taxes Department is administering the following Acts:

1.The Tamil Nadu General Sales Tax Act,1959.

2.The Tamil Nadu Additional Sales Tax Act,1970.

3.The Central Sales Tax Act,1956.

4.The Tamil Nadu Entertainments Tax Act,1939.

5.The Tamil Nadu Betting Tax Act,1935.

6.The Tamil Nadu Tax on Luxuries Act,1981.

7.The Tamil Nadu Advertisement Tax Act,1983.

8.The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act,1990.

9.The Tamil Nadu Tax on Entry of Goods into Local Areas Act,2001.

ADMINISTRATIVE SETUP:

The Commercial Taxes Department presently functions under the control of the Hon'ble Minister of Commercial Taxes . It comprises of three wings, viz., Assessment, Enforcement and Appellate.

At the Secretariat, matters relating to the Commercial Taxes Department are looked after by the Secretary to Government (Commercial Taxes).

The Assessment Wing and Enforcement Wing function under the control of Commissioner of Commercial Taxes while the Appellate Wing functions under the control of the Chairman, Tamil Nadu Sales Tax Appellate Tribunal, Chennai.

ASSESSMENT WING :
The State is divided into ten assessment divisions (territorial divisions) where the administrative head is the Deputy Commissioner (CT). In each division there are a number of Districts/Zones which are administered by Territorial Assistant Commissioners. Under the Assistant Commissioners (CT) there are assessment circles headed by the Commercial Tax Officers/Deputy Commercial Tax Officers. In Chennai and Coimbatore city, assessments relating to selected big companies are looked after by the Assistant Commissioners (CT) Fast Track Assessment Circle who function under the administrative control of Deputy Commissioners (CT) Chennai and Coimbatore. At present in Tamil Nadu there are 10 Divisions, 40 CT districts and 323 Assessment Circles including 6 Fast Track Assessment Circles (4 in Chennai and 2 in Coimbatore) in the Assessment Wing.

ENFORCEMENT WING:
In the Enforcement wing, there are 7 Deputy Commissioners (CT) (Enforcement) for Divisional Enforcement Administration and 10 Assistant Commissioners (Enforcement) for District/Zonal Enforcement administration. The Inspecting groups, Roving squads, Check posts etc. function under the Assistant Commissioner (Enf). There is one Deputy Commissioner (CT) (Enf) exclusively dealing with matters relating to inter-state investigation designated as Deputy Commissioner (CT) (Enf) (Inter State Investigation Cell), Chennai.

APPELLATE WING:

There are 20 Appellate Assistant Commissioners to redress dispute arises from the assessment orders of the Assessing Authorities upto the cadre of Commercial Tax Officers. In respect of dispute on assessment orders from the Assistant Commissioners heading Fast Track Assessment Circles in Chennai and Coimbatore, Appellate Authorities in the cadre of Deputy Commissioner are functioning in Chennai and Coimbatore. The Appellate Wing is headed by the Chairman, Sales Tax Appellate Tribunal, Chennai in the cadre of District Judge. Further any appeal (that is a second appeal) against the orders of the first appellate authorities lie before the Sales Tax Appellate Tribunal at Chennai with Additional Benches at Chennai, Madurai and Coimbatore. An appellate order from the Tribunal can be the subject of revision before the Honourable High Court of Madras.

At the headquarters, 6 Joint Commissioners (CT) are assisting the Commissioner of Commercial Taxes in the administration of the Department. There is a post of Joint Commissioner (Public Relations) to deal with matters relating to the public and to issue clarifications on the Acts administered. The Joint Commissioner (Administration) assists the Commissioner in the general administrative matters of the department, this is a cadre post.

REGISTRATION:

Procedures for registration under the Tamil Nadu General Sales Tax Act,1959 and the Central Sales Tax Act, 1956 are given separately .

CLARIFICATION

Any point concerning the rate of tax on commodities under the Tamil Nadu General Sales Tax Act, 1959 can be got clarified by the Commissioner of Commercial Taxes by submission of an application for clarification along with a payment of Rs.500/-.

FILING OF RETURNS:

Monthly returns should be filed by all assessees in Form "A1" and for exclusive re-sellers in Form AB1 under Tamil Nadu General Sales Tax Act 1959.

The returns should be filed in the assessment circle in which the assessee has his business registered on or before the 20^th of every month for the transactions relating to the previous month along with proof for payment of tax due from the dealer. If the total turnover for the financial year exceeds Rs.3 lakhs, the dealer is liable for assessment to tax.

In respect of the dealers whose taxable turnover is more than Rs. 200 crores in the previous year, the due date for filing the monthly returns in Form A1 is on or before 12th of the succeeding month, with proof for tax payment.

The tax should be paid by the assessee along with the returns by way of cash or cheque or by Demand Draft favouring the Assessing Officer of the Assessment Circle.

ASSESSMENT:

SELF ASSESSMENT

A. A dealer whose aggregate turnover in a year (turnover relating to local sales, inter-state sales, export sales, branch transfers, consignment sales all put together) does not exceed ten crores of Rupees may make a self-assessment for that year subject to following conditions. This provision of self-assessment shall apply to the assessments for the financial years, commencing on the first day of April 2001. In self assessment cases, an annual return in the Form 'A-12' has to be submitted to the assessing authorities concerned on or before October 31st of succeeding year.

1) Where his aggregate turnover does not exceed forty lakhs of rupees per annum and he:

i) files the declaration forms and certificates, if any, for the purpose of claiming concessional rate of tax or exemption as the case may be, along with the annual return;

ii) is not in arrears of tax as per the monthly and annual returns filed;

iii) is not in arrears of tax not covered by appeals, revisions and writs for the years preceding the year of assessment;

iv) is not doing business for the first and last year; and

v) registers an increase of ten percent of the taxable turnover in the year of assessment compared to the preceding year.

2) Where his aggregate turnover exceeds forty lakhs of rupees but does not exceed one crore of rupees per annum, besides fulfilling the above conditions in clause 1) shall file his return as per accounts audited and certified by a Chartered Accountant or by Cost Accountant.

3) Where his aggregate turnover exceeds one crore of rupees but does not exceed ten crores of rupees per annum, besides fulfilling the above conditions stipulated in clauses 1) and 2) above, shall register an increase of fifteen percent in payment of tax as per the return over and above the payment of tax due as per return in the preceding year.

Provided that the conditions relating to increase in taxable turnover and payment of tax as per return shall not be applicable to dealers who are non-assessees.

Provided further that the increase in taxable turnover or payment of tax mentioned in sub-clause v) of clause 1) or clause 3) as a result of amalgamation or merger of two or more firms shall be with reference to the total of taxable turnover or payment of tax of such firms before amalgamation or merger in the preceding year as per the return.

B. Assessment, after check of accounts: If the total turnover exceeds ten crores of rupees and for 5% of the cases selected at random by computer from the list of assessees who fall under the self-assessment category, the accounts of such dealers shall be produced before the Assessing Authority to prove that the returns submitted by them are correct and complete. The Assessing Officer will call for the accounts by issuing summons. If the dealer is unable to produce the accounts on the summoned date, he may seek adjournments on sufficient reasons.Failure to produce accounts even after enjoying sufficient opportunity will lead to finalisation of assessment to the best judgement of the Assessing Officer. An order of final assessment will be made and served on each assessee.If any demand is raised in the year it shall be paid within 30 days from the date of receipt of the order, otherwise with a penal-interest for the belated payment @ 2% per month and fraction there of.

REFUNDS:

If there is any excess amount paid, the dealer can get refund within 90 days or he can request in writing to adjust that excess amount for his arrears, if any, or for his future demand.

If the refund is not made within 90 days, an interest of 1% per month shall be paid to the dealer

APPEALS

If the dealer is aggrieved by the order of the Assessing Authority in respect of the final assessment or revision he can prefer an appeal before the Appellate Assistant Commissioner concerned; if the orders are passed by the Fast Track Assessment Circle, the appeal should be filed before the Deputy Commissioner (CT) (Appeals) concerned, within 30 days from the date of receipt of the assessment order. The tax admitted and 12.5% of the tax disputed should also be paid along with the application as a pre-condition for admission of the appeal.

Against the orders of the Appellate Assistant Commissioner (CT) or Deputy Commissioner (CT) (Appeals), the dealer can prefer a second appeal before the Sales Tax Appellate Tribunal concerned within 60 days from the date of receipt of the appeal order. Against the orders of the Sales Tax Appellate Tribunal, the dealer can prefer a further appeal before the High Court.

Powers of revision were conferred upon the Deputy Commissioner (CT) under sec 33 of the Act where provision for first appeal has no force. The Joint Commissioner (CT) has powers of revision under Section 34,35 and 36 of the Act.

As a result of amendment to sec 34 of Tamil Nadu General Sales Tax Act by Act No 60/97 consequential amendment to sec 36(1) was also made. By this amendment, Suo Motu Revision powers of Joint Commissioner against the orders of Appellate Assistant Commissioner/Appellate Deputy Commissioner were taken away and a right of filing an appeal before the Sales Tax Appellate Tribunal like that of a dealer aggreived of the orders of the first Appellate Authority has been given to the Department. The time limit for filing the appeal has been fixed at 120 days.

ENFORCEMENT:

With a view to check evasion of tax, shop inspections are organised by the Assistant Commissioners (CT) (Enforcement) or Deputy Commissioners (CT) (Enforcement) on the basis of investigation file. The Officer deputed for inspection shall inspect the shop, etc., and get the records verified. If necessary he may also seize the records, if any evasion of tax is suspected. A statement shall be taken from the dealers or the person in-charge of the place of business by the Officers. The letter of authorisation given by the Assistant Commissioner (CT) or Deputy Commissioner (CT) shall be voluntarily shown to the dealers before the commencement of every inspection. At the end of the inspection, the Officers will furnish a copy of Form D1, copy of statement recorded and in the cases of seizure of records, a receipt in Form D7 immediately to the dealer.

There are check-posts in different places of the State to check the goods transported and to ascertain whether tax or not has been paid for those goods. Every vehicle should stop at the Check-post and the logbook (GVR) and copies of sale bills or Form XX shall be produced before the Check-post Officer for verification. After verification, a copy of sale bill or Form XX, XX (A), XX (B),XXVII as the case may be shall be taken by the checkpost officer of the first and last checkpost, while the remaining documents will be handed over to the driver after affixing the Checkpost seal in the Log book and also on the documents handed over for verification. For every such check, a sticker for acknowledgement is issued by the check post through computer.

Transit pass in Form XXXVI should be obtained from the Assessing Authority or from the officer of the first check-post for the transportation of goods such as washing machine, refrigerator, air-conditioner, air-cooler, water coolers and diesel engine as branch-transfers or consignments sent to agents outside this State and for the transportation passing through this State. The transit pass shall be surrendered at the last Checkpost within a reasonable time prescribed.

If the Check-post Officer suspects that tax has been evaded by the transporter, he shall detain the goods by issuing an order of detention immediately and by way of issue of notice, the driver may be asked to pay the tax, C fees, security etc. If the driver has paid the C fees and tax, the vehicle will be released immediately.

If the goods are detained by a far-away Check-post Officer for verification of certain documents on technical goods, then those documents may also be handed over for verification before the Assistant Commissioner (Enf) having jurisdiction over the area where the dealer is doing business and get the goods released by a release order.

CONCESSIONS

Every manufacturer of finished goods on issue of Form XVII to the seller, is eligible for a concessional rate of 3% on the purchase of I Schedule goods of the Tamil Nadu General Sales Tax Act, 1959, except a few. Form XVII can be obtained from the assessment circle concerned on payment of cost.

Every registered dealer under the Central Sales Tax Act,1956 is eligible to issue Form C to his seller for his purchases from the registered dealers of other States, in order to avail the concessional rate of 4%. Form C can be obtained from the Assessment Circle concerned on payment of cost.