Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: Central Excise rule to resale the machines to a new company :: VAT RATES :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: due date for vat payment :: ACCOUNTING STANDARD :: empanelment :: form 3cd :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: cpt
VAT (Value Added Tax) »
 Cenvat Credit Of Additional Duties Of Customs [Cvd] On Imported Coal
 Excise Dept puts VAT refund on fast track
 Consumer fora receive 18 VAT plaints
 Appointment of Assistant VATO - F.3(14)/Fin(Rev-I)2012-13/DSVI/334
 Bio-diesel body seeks VAT relaxation
 HC seeks Delhi, centre reply on restaurants charging excess VAT, service tax
 Shakti Autos booked for evading VAT, bogus sales
 VAT sops to IOCL Paradip refinery hits Odisha revenue growth
 Government to announce new VAT rates in October
 World Wide Gst, Vat, Sales Tax Rate
 Article on Transition Process of Registrations under VAT / Service Tax Laws to GST Law

IFFCO says it may have to shut down UP operations
April, 17th 2012

Indian Farmers Fertiliser Cooperative (IFFCO), a major fertiliser supplier, fears it will be forced to shut operations in Uttar Pradesh as Reliance Industries has agreed to pay under protest a disputed tax levied by the state on natural gas, and pass the burden to customers.

"From 2 crore a month, our overall payments have now increased to 21 crore, as instead of the regular 10% VAT rate we are paying the penal rate of 26%. At this rate, we will have to close down as we cannot afford this," a senior IFFCO official told ET.

The UP government had levied VAT on Reliance's gas from April 2009. RIL secured a stay order against the state levy from the high court, but subsequently when the state approached the Supreme Court the company told the apex court in January this year that it will start paying VAT from February 1, 2012, and pass on the burden to consumers.

The company still opposes the tax and will seek a full refund if it wins the case, sources close to RIL said. RIL has argued that it was already paying central state tax on the gas produced in the KG-D6 block off the Andhra Pradesh coast.

RIL supplies gas to four fertiliser companies in the state - IFFCO's Aonla and Phulpur units, Kribhco's Shahjahanpur plant, Indo Gulf Fertiliser's Jagdishpur unit and Tata Chemicals' unit at Babrala.

The IFFCO official said RIL's move was surprising as the company itself had challenged the tax. "We cannot understand RIL's about-turn on the issue and it volunteering to pay VAT especially when earlier it had filed a writ petition in the Allahabad High Court resisting the imposition of tax. We were also party to the same petition and RIL took this step without informing or consulting us," added the official.

RIL declined comment, but a source close to the company said it had not changed its position on the tax. "The company cannot go on bearing the contingent liabilities on our books as the overall outstanding amount will go on increasing, and we are only the collectors in the end.

Sellers have to make the final VAT payments. The company has written to the state that its is paying this amount under protest and will claim a full refund in case the high court rules in its favour," the source said.

"RIL could have decided on this course of action to avoid showing any contingent liability on its books," added the IFFCO official.

"This entire issue is extremely unfair as no other state customers are forced to pay both Central Sales Tax and VAT on the supply of gas. It is completely unconstitutional as it amounts to double-taxation, it is difficult to comprehend RIL's stance," another senior IFFCO executive told ET. RIL did not respond to an email sent by ET.

The Supreme Court has asked the Allahabad High Court to decide on the plea against the VAT demand made by the state government within three months. "We are hoping that the high court will rule in our favour or else we will find it very difficult to sustain ourselves," the official added.

RIL, on the other hand, had submitted in the Supreme Court that the Uttar Pradesh government's levy amounted to double taxation as it was already paying central sales tax. Indo-Gulf Fertliser refused to comment while Tata Chemical and Kribhco were unavailable for comment.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions