1. Section 13 of the Kerala Value Added Tax Act,2003
provides for refund of input tax in the case of
interstate sale/ stock transfer and export. Refund
will be available where the goods purchased after
paying input tax are-
(1)
sold interstate of exported
(2)
used as packing material of goods sold interstate
or exported.
(3)
Used in the manufacture of goods and the manufactured
goods are sold interstate or exported.
(4)
Used as capital goods in relation to goods sold
interstate or exported.
(5)
Sent as stock transfer to outside the state or the
goods manufactured or packed using the goods purchased
are sent as stock transfer to outside the state,
where input tax had been paid in excess of 4%.
2.
In the case of interstate sale or stock transfer
refund of input tax will be available only if the
goods sold interstate or sent as stock transfer
are taxable.
But
in the case of export, refund of input tax is provided
for even if the goods purchased are used in the
manufacture of goods included in the first schedule
or are used as containers or as packing materials
of such goods and such manufactured goods are sold
in the course of export.
3.Rule
46 and 47 prescribe the procedures to be followed
for claiming refund. The application for refund
in the case of interstate sale/stock transfer and
exports are to be in Form Nos 21B and 21C respectively
along with the application the following documents
have to be submitted:
A.
Interstate sale /Stock transfer
(i)
The statement of interstate sales in the prescribed
form.
(ii)
Copy of transport documents (LR/RR etc)
(iii)
Declaration in Form 21J, obtained from the
dealer who had collected the tax in respect of which
refund is claimed.
(iv)
A declaration in Form No. 44 obtained from the consignee.
B.
Export
(i)
Exporter’s copy or export promotion copy of the
shipping bill duly certified by the Customs authority.
(ii)
A certificate from the dealer’s Bank to proof receipt
of payment from the foreign buyer.
(iii)
Declaration in Form 21J, obtained from the
dealer who had collected the tax in respect of which
refund is claimed
(vi)
Declaration in Form H prescribed under the Central
Sales Tax (registration and Turnover) Rules, 1957
where the sale by the dealer claiming refund false
under sub-section (3) of section 5 of the CST Act,
1956 irrespective of whether the exporter is within
the state or outside the state.
4. In the case of Form No. 21J, as amended by the
Kerala Value Added Tax (Amendment) Rules, 2005,
what the assessing authority is required to certify
is only that the selling dealer who had issued the
certificate in Form No. 21J has included
all the sales covered by the declaration in the
sales statements furnished along with the monthly
return.
5.It is noticed that some of the assessing authorities
insist on production of C form along with the application
for refund to prove interstate sale. But, as per
the second proviso to sub-rule (1) of Rule 12 of
the CST (Registration and Turnover) Rules, 1957,
as amended by the CST (Registration and Turnover)
third amendment Rules, 2005 issued as per notification
GSR 588(E) Dt. 16.09.05, (2005) 13 KTR (statutes)
859 a single declaration in C form can cover all
transactions of sale which take place during a quarter
of a financial year between the same two dealers.
Further as per sub-rule (7) as substituted, declaration
in Form C or Form F or the certificate in Form E1
or E2 are permitted to be furnished to the prescribed
authority within three months after the end of the
period to which the declaration or the certificate
relates. The prescribed authorities are given power
to extend the time for sufficient reasons. So insisting
on production of C form or F form as a condition
precedent for allowing refund of input tax will
be contrary to the provisions of the CST (Registration
and Turnover) Rules, 1957
6. As per Rules where the dealer submits the application
along with required documents, refund has be given
within three months. But till date not even a single
refund claim could be process and refund given.
This has affected the image and credibility of the
Department.
7. In the circumstances the following instructions
are issued for the processing of refund claims.
(i)
Where certificate in Form No. 21J is produced before
any assessing authority for certification, the assessing
authority shall verify the particulars furnish therein
with reference to the sale statement filed by the
selling dealer along with the return in Form 10.
If the bills mentioned in Form No. 21J are included
in the statement filed along the return, the assessing
authority shall issued the certificate immediately,
at any rate within two days.
(ii)
Where application in Form Nos. 21B or 21C as the
case may be is submitted, the assessing authority
will verify whether the all the documents required
are submitted along the application. The documents
submitted shall be verified to see whether they
are prima-facie in order.
(iii)
If the application and documents submitted support
thereof are prima-facie in order refund order shall
be issued within one month. However it should be
ensured as per as possible that all claims received
up to 28th February, 2006 are processed
and refund issued to the assesses before 31st
March, 2006.
(iv)
In cases where Form No 21J is not certified by the
assessing authority of the dealer issuing Form No.
21J, refund will be issued where the application
is supported by other documents prescribed and the
dealer claming refund furnishes security as required
by sub-rule (5) of Rule 46 or Sub-rule (4) of Rule
47, as the case may be. In such cases Form No.21J
submitted by the dealer claiming refund shall be
sent to the assessing authority with whom the selling
dealer is registered. The assessing authority to
whom the declarations in Form No. 21J is sent for
verification shall complete the verification and
return it to the authority concerned with in a week
positively. Where the report received confirms the
claim made by the dealer, the security furnished
shall be released to the dealer concerned.
(v)
In case where refund is issued, the record shall
be immediately transferred to the Audit Assessment
wing. The audit assessment wing shall under take
audit in respect of all refund cases on priority
basis.
(vi)
In cases where any irregularities detected in audit,
simultaneously with initiating penal action against
the dealer concerned, wherever necessary, the audit
assessment wing shall give necessary intimation
to the assessing authority who issued the refund
order, and the proceed to, make best judgment assessment
to demand the revise the tax for the amount wrongly
claimed as refund.
(vii)
In case where the Audit Assessment Wing reports
any fraud, further claims of refunds will be honoured
only after audit of the refund claims by the audit
assessment wing.
8.
The Deputy Commissioners concerned will closely
monitor the progress of disposal of refund claims
and ensure that prompt action is being taken on
the applications. The particulars of refund claims
received, amount of refund claim and amount of refund
issued will be reported to the undersigned so as
to reach him by the 15th and 20th
of every month through E-mail.
9.
The Deputy Commissioners shall acknowledged the
receipt of the circular and obtained acknowledgment
from their subordinates. The Deputy Commissioners
hall discuss this in the next monthly conference
of officers and intimate any points for further
clarifications or directions to the undersigned
before 15th Jan. 2006.
Sd/-
COMMISSIONER
