Important Entry Tax Accounting Provisions & Guidelines
1. The assessable value is to be determined as existing at the time of entry of the scheduled goods and their value after entry is not material.
2. Entry tax is payable on amount of purchase price plus freight, commission, duties, taxes and other expenses. i.e., it is on all inclusive charges and price. - refer section 2(J).
3. Only scheduled goods are subject to entry tax at the rates applicable as per schedule and therefore, the schedule should be carefully seen for the commodity covered. In case any commodity is appearing by name or by description it is to be subjected to tax and if not appearing in the schedule then no entry tax is payable. However, if any entry is appearing both in the schedule I & II then the applicable rate will be as per schedule II i.e., higher. – refer section -3.
4. Raw materials falling under Schedule I & II are to be subjected to 50% of the applicable rate (i.e., concessional rate & maximum benefit is to be taken in this regard). This is applicable whether it relates to their first entry or purchase from registered dealer brought by him to local area. Refer Rule – 3. And Form – E15
5. In case the finished products are also scheduled goods i.e., subject to entry tax then the set off of input tax is allowed against the amount of entry tax paid on finished goods. Refer rule – 19.
6. Tax is on entry of scheduled goods for consumption, use or sale and therefore, if the goods are not for such purpose or after entry are taken out of the area, as such, then no tax will be payable or it will be adjusted. Refer Section 3 and Rule 17.
7. If entry tax has already been paid by any other person then no tax is to be paid again provided details are submitted on form – E1 along-with return. Similarly no tax is payable on purchases made within local area from registered dealer. Refer Rules 3(5) & 17 & form – E1.
8. The return should be accompanied with full payment of tax otherwise the return will be deemed to be not submitted. In such case 2% will be charged as interest on the amount of tax due per month till payment. If the payment is found to be not made with sufficient cause, then in addition to tax and interest penalty will be charged @2% per month on the amount of tax and interest. Refer Section 7(1) read with 7(6), 7(7).
9. The audit assessment is done on the identification of dealer by the Commissioner taking into account the chances of evasion or risk involved. In such case the audit is conducted and audit visit report is prepared. The audit visit report is submitted to the dealer along with notice on form – E30 and allowing a time of at least 30 days to rebut the contentions of audit. Not more than 3 adjournments will be granted to hear the party. Such assessments are to be completed within a period of 6 months from the date of receipt of audit visit report by the party. Even If extension is granted by the Commissioner the maximum period can not go beyond one year and the assessment order is to be issued within that period. If the officer is not satisfied with the explanations and documents submitted by the party or if ex-parte best judgment assessment is made in that case a penalty of twice the amount of tax assessed shall be made. (No provision is noted for payment of interest ) – Refer Section 9B & 9C read with rule 15B & form – E30.
10. The appeal is to be filed with 30 days of service of assessment order. The appeal will not be entertained if it is not accompanied by payment of full amount of admitted tax and 20% of the amount of tax or interest or both in dispute. Not more than 3 adjournments shall be granted to the party when appeal is fixed for hearing. The party is to file stay application for non-payment of full tax and on hearing of the stay application the stay may be granted till disposal of the appeal or additional tax may be asked before such stay is granted. Refer Section – 16(3) read with Rule – 23 & Form – E33.
11. The return is to be filled in form –E3 and accompanied with form – E15
ENTRY TAX – IMPORTANT PROVISIONS
1. The assessable value is to be determined as existing at the time of entry of the scheduled goods and their value after entry is not material.
2. Entry tax is payable on amount of purchase price plus freight, commission, duties, taxes and other expenses. i.e., it is on all inclusive charges and price. - refer section 2(J).
3. Only scheduled goods are subject to entry tax at the rates applicable as per schedule and therefore, the schedule should be carefully seen for the commodity covered. In case any commodity is appearing by name or by description it is to be subjected to tax and if not appearing in the schedule then no entry tax is payable. However, if any entry is appearing both in the schedule I & II then the applicable rate will be as per schedule II i.e., higher. – refer section -3.
4. Raw materials falling under Schedule I & II are to be subjected to 50% of the applicable rate (i.e., concessional rate & maximum benefit is to be taken in this regard). This is applicable whether it relates to their first entry or purchase from registered dealer brought by him to local area. Refer Rule – 3. And Form – E15
5. In case the finished products are also scheduled goods i.e., subject to entry tax then the set off of input tax is allowed against the amount of entry tax paid on finished goods. Refer rule – 19.
6. Tax is on entry of scheduled goods for consumption, use or sale and therefore, if the goods are not for such purpose or after entry are taken out of the area, as such, then no tax will be payable or it will be adjusted. Refer Section 3 and Rule 17.
7. If entry tax has already been paid by any other person then no tax is to be paid again provided details are submitted on form – E1 along-with return. Similarly no tax is payable on purchases made within local area from registered dealer. Refer Rules 3(5) & 17 & form – E1.
8. The return should be accompanied with full payment of tax otherwise the return will be deemed to be not submitted. In such case 2% will be charged as interest on the amount of tax due per month till payment. If the payment is found to be not made with sufficient cause, then in addition to tax and interest penalty will be charged @2% per month on the amount of tax and interest. Refer Section 7(1) read with 7(6), 7(7).
9. The audit assessment is done on the identification of dealer by the Commissioner taking into account the chances of evasion or risk involved. In such case the audit is conducted and audit visit report is prepared. The audit visit report is submitted to the dealer along with notice on form – E30 and allowing a time of at least 30 days to rebut the contentions of audit. Not more than 3 adjournments will be granted to hear the party. Such assessments are to be completed within a period of 6 months from the date of receipt of audit visit report by the party. Even If extension is granted by the Commissioner the maximum period can not go beyond one year and the assessment order is to be issued within that period. If the officer is not satisfied with the explanations and documents submitted by the party or if ex-parte best judgment assessment is made in that case a penalty of twice the amount of tax assessed shall be made. (No provision is noted for payment of interest ) – Refer Section 9B & 9C read with rule 15B & form – E30.
10. The appeal is to be filed with 30 days of service of assessment order. The appeal will not be entertained if it is not accompanied by payment of full amount of admitted tax and 20% of the amount of tax or interest or both in dispute. Not more than 3 adjournments shall be granted to the party when appeal is fixed for hearing. The party is to file stay application for non-payment of full tax and on hearing of the stay application the stay may be granted till disposal of the appeal or additional tax may be asked before such stay is granted. Refer Section – 16(3) read with Rule – 23 & Form – E33.
11. The return is to be filled in form –E3 and accompanied with form – E15
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