TNVAT – Changes proposed in Budget 2015-16

The State Budget for the year 2015-16 was presented in the Legislative Assembly today. There were certain proposals proposed in the budget presented. The following are the proposed Changes in TNVAT :-

1) Electricity Tax on generating plants using Biomass (excluding bagassee) will be withdrawn to give a boost to green energy producers.

2) Input Tax Credit reversal imposed at the rate of 3 per cent on the inter-state sale of goods as per proviso to section 19(2) (v) of Tamil Nadu Value Added Tax Act 2006, which was introduced with effect from 11.11.2013 will be withdrawn henceforth to make the manufacturing industries in Tamil Nadu more competitive with their counterparts in the neighbouring States.

3) Clause (c) under Section 19(5) of TNVAT Act, 2006 will henceforth be withdrawn to enable the dealers to claim Input Tax Credit on the inter-State sale of goods without ‘C’ form. This measure will eliminate additional burden on the dealers effecting inter-State sale of goods without ‘C’ form.

4) Fishing accessories like fishing ropes, fishing floats, fishnet twine, fishing lamps and fishing swivels will be exempted from the present levy of VAT.

5) Mosquito nets of all kinds will be exempted from the present levy of VAT at 5%.

6) Works contract relating to sizing of yarn will be exempted from the present levy of VAT.

7) VAT on cardamom will be reduced from the present levy of 5% to 2%.

8) VAT on LED lamps of all kinds will be reduced from the present levy of 14.5% to 5% to encourage the use of energy saving devices.

9) VAT on air compressors, pump sets up to 10 hp and their parts thereof will be reduced from the present levy of 14.5% to 5% to encourage MSME Sector and to benefit the agriculturists in the State.

10) VAT on cellular telephones (mobile phones) will be reduced from the present levy of 14.5% to 5%.

The above changes will be effective from the date when these are published in the Gazette.



Registration under TNVAT Act – New Procedure

The Tamilnadu Commercial Tax Department has issued a new Circular No 2/2014 prescribing the revised guideline and procedures to be adopted for Registration and Issue of Registration Certificate to dealers.

The salient features of this circular are as follows :-

1) Previously, application for new registration of a business in respect of six evasion prone commodities (viz., Electrical goods, Iron & Steel, Tiles & Marbles, Timber, Edible oil and Granite) were subject to enforcement Scrutiny and after completion of this scrutiny only registration formalities was completed by the respective jurisdictional officers. Now the pre-inspection of places of business in respect of all commodities have been made mandatory.

2) New Applicants shall be given acknowledgement slip on receipt of the application.

3) The documents shall be completely scrutinized for correctness and a date for the pre-inspection (within a week) shall be fixed.

4) The officer , at the time of pre-inspection , shall check the genuineness of the ownership of the building, suitability of the building for storing the goods, and also shall ensure the validity of various address & identity proofs provided by the applicant.

5) With regard to Security deposit, the existing procedure as per Rule 5 shall be followed.

The relevant circular is reproduced below :-

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Important amendment to TNVAT Act regarding ITC Reversal

The Tamilnadu Government has made few important amendments in TNVAT Act with regard to reversal of Input Tax Credits in respect of Inter-state sales and Stock Transfers outside the State.

These amendments were carried out by enacting a Tamilnadu VAT (Fifth Amendment) Act, 2013 (Amendment Act) on 8th November 2013.

The effective date for these amendments is 11th November 2013.

The effect of these amendments are as follows :-

Sl. NoNature of TransactionPosition upto 11th Nov 2013Position w.e.f 11th Nov 2013
1Inter-state sales against C Form (Chargeable to tax @ 2% at present)No reversal of ITC RequiredInput Tax Credit allowed in excess of 3% of Tax
2Stock Transfers outside the state (ie) Transfer outside the state otherwise than by sales.ITC allowed in excess of 3%.ITC allowed in excess of 5% of tax.

The relevant Notifications are reproduced below :-

Download (PDF, Unknown)

Download (PDF, Unknown)


How to check whether a TIN / CST Number is genuine ?

Many times business entities get Invoices and Forms (Form C, Form F, Form E-I, E-II) out of the state where their office is situated. As a business entity , during VAT / CST assessments , the onus is on the assesee to prove the genuinity of the Invoice/Forms and the Registration of the dealer from whom the goods are purchased. In such cases, if they want to check with regard to the genuineness of the TIN/CST Number , Forms such as “Form C” and “Form F” and the status of the same , the link provided below will help you to check the following :-

1) Search the TIN number (All India)

2) Search the CST Number (All India)

3) Verification of Forms (Form C, F, EI & E II)

Click here to check TIN/CST/Forms


TN VAT Registration – Who are Liable?

1) Those dealers whose total turnover in respect of purchase and sales
in the State is not less than Rs.10 lakhs for a year are to get
registered under the Act.
2) The other dealers whose total turnover for a year is not less than
Rs.5 lakhs shall get registered.
3) Casual Traders, agent of non-resident dealer and dealers in
jewellery irrespective of quantum of turnover shall obtain
4) Those dealers who intend to commence the business,  on option,
may obtain registration.
Want to Register for VAT in Chennai? Click Here to Send an Enquiry to us.