Ordinance by Punjab Vat under sec. 8B for levy of additional tax - Applicability

[madhavvan n]

Interpretation of sec 8B introduced under ordinance by Punjab Vat wef 4th February 2010 There shall be levied and collected on the taxable turnover of a person, other than the registered person, an additional tax, which shall be calculated at the rate of 10% of the tax payable by him under this act. answer For this we need to ascertain whether the person is liable for registration as per provisions of sec 21 . (1) No person other than a casual trader, who is liable to pay tax under this Act, shall carry on business, unless he is registered under this Act. Now we will look at who is liable to pay tax as per sec 6 the incidence and levy of tax ( the relevant section is attached) from which it can be concluded that the registration is linked to taxable quantum wherein according to me everybody would get covered unless he is a casual trader Hence my conclusion is that this ordinance under sec8B for levy of additional tax is applicable to only casual traders and they will have to pay the tax as per the following: 8. (1) Subject to the provisions of this Act, there shall be levied on the taxable turnover of a person other than a registered person, VAT at such rate, as specified in Schedules, but not exceeding thirty paise in a rupee. From the above it can be seen that the casual trader is also required to pay the tax as per the VAT rate specified in schedule and in addition he will be liable for payment of this additional tax @ 10% of the tax payable ( first tax liability will be determined after applying the rate to the goods sold and then vat liability is determined on which the additional tax of 10% will be levied and collected). Further the casual trader not being a registered person cannot issue a VAT Invoice as per PBVAT readers can comment on above with their views

AI Summary

Punjab VAT Section 8B: 10% Additional Tax on Unregistered Casual Traders' Turnover from Feb 4, 2010 An ordinance under Punjab VAT Section 8B, effective from February 4, 2010, mandates an additional tax of 10% on the taxable turnover of unregistered persons, specifically targeting casual traders. The ordinance requires these traders to pay VAT as per the specified schedule rates, plus the additional tax. Casual traders, being unregistered, cannot issue VAT invoices. A query was raised about the liability of individuals conducting business without registration upon detection by the HVAT department. The discussion invites further comments on these interpretations and implications for unregistered traders.