Notional calculation for sales tax exemption availed - CST & State Sales Tax

[NAUSHERAWAN SM]

We had availed sales tax exemption under Bihar Industrial policy 1995 under Notification No. S.O. 479 and S.O. 481 (Bihar & Jharkhand ). The govt. exempted manufacturing unit from levy of sales tax on sale of finished products within state and in course of interstate trade and commerce for a specified period or prescribed monetary limit whichever is early. Assessment of exempted units is to be completed notionally at the prescribed rate of goods i.e. concessional rate of tax 2% or 3% as the case may be to watch prescribed monetary limit of exemption. We are manufacturing automobiles parts and also excavator parts which being finished products are sold to the different registered manufacturers. The automobiles parts and excavator parts therefore are being directly use in the manufacture of automobile or excavator. Therefore, in view of of section 13 (1) (b) of B.F. Act, 1981 is to be taxed at the special rate of 2% or 3% of its product which are being sold to automobile manufacturers or excavator manufacturers. The Sales Tax deptt. re-assessed our books and accounts on the basis of Audit objection raised by AG and charged full rate or of tax @ 8% or 10% as the case may be on the ground that no Form-IX and C-Form has been submitted at the time of Assessment.

Your valuable suggestion in this regard is needed.
Whether Form-IX or C-Form is mandatory for arrival of notional calculation on concessional rate of tax or the notional caluclation of Sales will be charged full rate of tax in absence of Form-IX or C-Form..

S.M.Nausherawan

Sr.Manager (Indirect Taxes)

RSB TRANSMISSIONS (I) LTD.

JAMSHEDPUR.

AI Summary

Debate on Sales Tax Exemption: Are Form-IX and C-Form Necessary for Concessional Rates Under Bihar Industrial Policy 1995? A discussion on a sales tax exemption issue under the Bihar Industrial Policy 1995, where a manufacturing unit availed tax exemptions but faced reassessment by the Sales Tax department due to the absence of Form-IX and C-Form. The query revolves around whether these forms are mandatory for applying concessional tax rates of 2% or 3% on sales to registered manufacturers. The department argues for full tax rates of 8% or 10% without these forms. Participants in the forum debate the necessity of these forms for notional tax calculations and the implications of their absence.