Order of clarification u/s 56 (3) of HVAT Act, 2003 on the application of M/s MRF Limited, 12-A Nehru Ground NIT, Faridabad.

This is an order of clarification u/s 56 (3) of the Haryana Value Added Tax Act, 2003, on the application of M/s MRF Ltd., Faridabad. The clarification sought is as to the correct rate of tax applicable on the flaps of tyres and tubes of motor vehicles.

The circumstances explained by the applicant company and the points on which the clarification has been sought are as follows-

Circumstance Explained : When VAT was introduced in Haryana with effect from 1-4-2003, the rate of tax on sale of goods were informed by Excise and Taxation Commissioner, Government of Haryana through Public Notice in Newspaper. It included that

“Goods which were leviable at rate of 8% would be taxed at the rate of 10%”. Thus, with effect from 1-4-2003, tyre, tube and flap which were hitherto taxed by them at the rate of 8% under serial no. 34 of notification no. S.O.46/H.A.20/73/S.15/2000 dated 3-3-2000 of Haryana General Sales Tax Act, were taxed at the rate of 10% under Haryana Value Added Tax Act.

But later vide notification no. S.O.93 / H.A.6 / 2003 / S.59 / 2003, dated 8-7-2003 the rate of tax on tyres and tubes were fixed at 8%. However flaps of tyres and tubes did not find a place in the change though flaps were grouped, all along, with tyres and tubes (refer serial no. 34 under Haryana General Sales Tax Act). Consequently, they continued to charge tax at the rate of 10% on sale of flap under the general rate under section 7(1)(a)(iv) of the Haryana Value Added Tax Act, 2003.

Clarifications sought: The correct rate of tax applicable on the flaps of tyres and tubes of motor vehicles.

2. The matter has been examined in the light of changes in the rates of tax effected on account of replacement of Haryana General Sales Tax Act, 1973, by the Haryana Value Added Tax Act, 2003, from 1-4-203. These changes were published for the information of all concerned through a Public Notice issued through newspapers. The public notice contained, inter alia, the following :

“ The rate of tax under Value Added Tax and exemption would continue as were under HGST Act, 1973 with following changes :-

(i) x x x

(ii) The goods which were leviable to tax @ 8% would now be taxed @ 10% except ice, bamboo, fire wood and saw dust which would now be taxable @ 4%.”

3. Since flaps were taxable @ 8% under entry 34 of notification no S.O.46/H.A.20/73/S.15/2000 dated 3-3-2000 issued under the Haryana General Sales Tax Act, 1973, these would, therefore, be taxable @ 10% under the Haryana Value Added Tax Act in view of the above cited public notice. However, in case any dealer has charged more than 10% tax on flaps after 1.4.2003, the tax shall remain payable at such higher rate.

4. This clarification shall be uploaded on the official website

Dated : 07.01.2004 Chander Singh

Financial Commissioner & Principal Secretary to

Government of Haryana, Excise & Taxation Department