No. C1-17413/95/TX.                                          Office of the Board of Revenue (Taxes),

                                                                               Thiruvananthapuram, Dt. 20..07..1995.

CIRCULAR No. 18/95

Sub:   Levy of Sales Tax on timber – 1993-94 Item (8) Schedule V refund of excess tax collected – instructions issued.

Ref:    Petition dated 09..03..95 of the President, Saw Mill Owner’s Association, Perumbavoor.

…..

The Saw Mill Owners’ Association has represented before the Board that some of the assessing authorities have assessed the timber dealer at the rate of 4% at the point of last sale for the year 1993-94 though they had remitted tax at the rate of 8% at the time of auction sale, to them by the Forest Department. Timber was an item taxable at all points of sale up to 31..03..1993. As per the Kerala Finance Act, 1993, timber was brought under Schedule V as item 8 taxable at the rate of 4% at the point of first sale and 4% at the point of last sale in the State. The forest Department ought to have collected tax at the rate of 4% only if the timber dealers participated in the auction sale were registered under the KGST Act, 1963. The Collection of Sales Tax at the rate of 4% at the point of last sale by the assessing authority is in accordance with law as the point of levy cannot be shifted. Since the timber dealers have remitted tax at the rate of 8% on the auction sale, they are eligible to get refund of the excess tax at the rate of 4% paid at the point of their purchase from the Forest Department.

As per rule 200 KTC Volume I, (Note 8) the assessing authority can issue a refund order in Form 49 of the KGST Rules, 1963, to the party for payment at the Treasury in which the original credits have been made.

In the above circumstances, the assessing authorities in whose jurisdiction the excess amount of tax had been remitted are directed to refund the excess amount of tax paid by the timber dealer on production of necessary evidences to prove the claim before the assessing authorities or to adjust the excess tax paid to any amount outstanding against them.

The Deputy Commissioners should acknowledge the receipt of the Circular and obtain acknowledgement from their subordinates.

Sd/-

Secretary (Taxes) – II