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

[Rama Krishana]

You may interpret the provision in the manner that a person who was liable to get himself registered but carries the business without obtaining registration what would be the liability of such person after detection by the HVAT department?

AI Summary

Additional tax on unregistered sellers increases tax liability after VAT calculation, affecting casual traders and unregistered dealers. Section 8B levies an additional tax on the taxable turnover of any person other than a registered person, calculated as a percentage of the tax payable; first the VAT due is determined by applying the scheduled rate to sales and then the additional tax is imposed on that VAT. The analysis concludes the provision principally affects casual traders who are taxable but unregistered and who cannot issue VAT invoices, though it may also apply to persons who should have been registered but operate without registration.