No. C1-10088/95/TX.                                          Office of the Board of Revenue (Taxes),

                                                                               Thiruvananthapuram, Dt. 30..08..1995.

CIRCULAR No. 22/95/TX

Sub:   KGST Act, 1963 – Assessment – Goods taxable at the point of last purchase – declaration in form25 in case where sales effected through Commission Agent – Furnishing of - Regarding.

Ref:    Board’s Circular No. 29/95/TX dated 24..11..1993..

…..

Attention of Officers is invited to Board’s Circular cited, wherein instructions were given to the assessing authorities regarding acceptance of form 25 declaration in respect of sale of goods taxable at the point of last purchase when sales are effected through Commission Agents. It was clarified therein that granting of exemption to a dealer on the strength of declaration in form 25 issued by his selling agent is irregular and that in all cases of pending assessments, exemption will be allowed on the strength of declarations issued by the dealer who purchases the goods from the Commission Agent wherein the name of the principal should also be noted.

It has been represented before the Board that considerable difficulties are being experienced by the dealers to obtain fresh declarations for back years as many of the commission agents have stopped business.

Board has examined the case and hereby direct, taking into account the genuine difficulties faced by dealers also, that the revised procedure prescribed in Circular no. 29/93/TX dated 24..11..1993 will be implemented only prospectively, ie., from the financial year 1993-94 onwards. For the back years the assessments will be completed on the strength of the declaration furnished by the agents provided they are otherwise in order. However, in order to safeguard the interests of revenue the assessing authorities should send one copy each of the declarations to the assessing authority in respect of the agents to ascertain whether the agent has sold the goods to a registered dealer within the State. If, on verification, it is found that the Commission Agent has sold the goods Inter State or has transferred the goods to a dealer outside the State, and the Agent has not paid any tax on the purchase turnover of the goods, the principal, who has claimed exemption on the strength of the declaration issued by the Agent, will be assessed to tax. As assessments relating to the period upto 1992-93 will get barred by limitation by July 1997, the assessing authorities shall complete the verification on top priority.

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

Sd/-

Secretary (Taxes) – II