Procedure for Adjustment of Cash Security Paid by Dealers at the Time of Registration under WB VAT

TRADE CIRCULAR NO. 07/2015
DATED: 13.05.2015

Queries have been received from dif­fer­ent quar­ters in con­nec­tion with the adjust­ment of Cash Secu­ri­ties paid by deal­ers at the time of reg­is­tra­tion under the West Ben­gal Val­ue Added Tax Act, 2003, and rules framed there under.

At the time of reg­is­tra­tion, a deal­er may have fur­nished one of the fol­low­ing types of cash secu­ri­ties, namely-

(a) Rs. 10 lakh under third pro­vi­so to rule 6B(1) for ‘Tatkhanik Reg­is­tra­tion’, adjustable imme­di­ate­ly after registration;

(b) Up to Rs. 1 lakh under sec­tion 24(2B), adjustable after 1 year from the date of issue of cer­tifi­cate of reg­is­tra­tion (omit­ted w.e.f. 01.07.2014); and

© Rs. 10,000/- to 25,000/- for vol­un­tary reg­is­tra­tion (up to 30.06.2014) adjustable after 2 years or Rs. 25,000/- for both Vol­un­tary as well as Com­pul­so­ry Reg­is­tra­tion (w.e.f. 01.07.2014) under rule 195(2), adjustable after 1 year from the date of issue of cer­tifi­cate of registration.

In order to resolve the prob­lems faced by deal­ers in adjust­ing such cash secu­ri­ties paid at the time of reg­is­tra­tion, the Direc­torate has come up with a solu­tion with the fol­low­ing procedure:-

1. Deal­er man­u­al­ly applies for adjust­ment of secu­ri­ty at Charge Office;

2. Assess­ing Author­i­ty ver­i­fies all nec­es­sary doc­u­ments to his/her sat­is­fac­tion and issues a Refund Adjust­ment Order (RAO) to the deal­er equal to the amount paid by the deal­er as cash secu­ri­ty at the time of reg­is­tra­tion or the amount which remains after for­fei­ture, if any;

3. Deal­er then adjusts the RAO against the amount of tax, inter­est and late fee payable accord­ing to return or suc­ces­sive returns which is or are due imme­di­ate­ly after the issue of RAO.

The RAO adjust­ment col­umn in return (under all Acts) shall val­i­date the RAO Book No. and Ser­i­al No. so that a sin­gle RAO can­not be re-used for fur­ther adjustment.

This pro­ce­dure shall come into effect from the returns for the quar­ter end­ing 30.06.2015 (i.e. returns falling due on 01.07.2015).