Hello Experts, Pls advise on the following issue:
A Manufacturing Unit obtained the Certificate of Registration (for CST & TIN Nos) under Value Added Tax (VAT) ACT, 2006 some 2 years back. But due to some internal issues, the company couldn’t able to start up their businesses as proposed. Now, the company is under construction level only. The erection work is in progress and the Unit to be commenced, shortly.
However, the Company NEVER failed to file their TAX Returns (NIL / ZERO Returns) every month to the local Commercial Tax Office. Also, the Company informed about their present stage to the CTO. But recently, they received a letter from CTO and mentioned that since the Company being Non-Assessee for the past two financial years, the CTO is intended to CANCEL their Certificate of Registration (CST & TIN Nos) u/s 39 (13) of VAT ACT, 2006. Also, the CTO asked the Company to explain that when the company will reach TAX ASSESSEE level to pay tax.
Consequently, the Company given a REPRESENTATION by sending a proxy in person and explained the actual facts in writing to CTO that they are seeking a Bank Loan which got delayed by their side. And also, the Proxy added that they will commence the Unit very shortly as soon as the loan is availed. The company attached the proofs too for obtaining a Bank Loan and asked at least 3 months of time to show the source of turnover/income and then become an Assessee.
At last, the CTO partially accepted Company’s statement and said that he will wait for only one month for the company to show their income/turnover and become a TAX ASSESSEE, failing which he could cancel the CST & TIN Certificates under section 39 of sub-section 13 of VAT ACT, 2006. But, the Sec. 39 (13) of VAT Act will be applicable, if only the company starts their businesses & liable to pay taxes according to their turnover, isn’t it…?!!
Actually, it will take minimum of 3 months for the unit to be commenced. The Company is NOT ONLY looking into Bank’s financial aid, moreover, they are trying from other parameters as well to commence their unit as soon as possible. So currently, to get hold of the same TIN/CST numbers, what the company has to do now? In this present scenario, is that company entitled to pay any direct/indirect taxes? Are they would get any rebate in the levy of taxes, by this time? Pls advise.
.If the CTO sends notice you may file appeal against the notice stating the facts and asks the AAC to restore the TIN. If you have already purchased cpaital goods say for example, machinery, gensets etc from Local suppliers you may claim ITC for capital goods.SO.in case of purchase your return is not to be considered as NIL. For further queries you may post.
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