Uttar Pradesh VAT Rules

Moratorium for payment of tax

1. The person making deductions under any clause of sub-section (1) or under sub-section (7) shall, at the time of payment or discharge, furnish to the selling dealer a certificate of amount deducted in such form and manner and within such period as may be prescribed and shall submit such statement of all such purchases, payments and deductions made and certificates issued by him, in such manner and within such time, as may be prescribed.
2. If any such person referred to in sub-section (1) or sub-section (7) fails to make the deduction or after making deduction fails to deposit the amount so deducted as required by sub-section (8), the assessing authority may, after giving to such person an opportunity of being heard, by order in writing, direct that such person shall pay, by way of penalty, a sum not exceeding twice the amount deductible under the section but not so deducted and, if deducted, not so deposited into the Government Treasury.
3. Without prejudice to the provisions of sub-section (10), if any such person, after deducting, fails to deposit the amount so deducted, he shall be liable to pay simple interest at the rate of one and quarter percent per mensum on the amount not so deposited from the date on which such amount was deducted to the date on which such amount is actually deposited.
4. Where the amount has not been deposited after deduction, such amount together with interest referred to in sub-section (11) shall be a charge upon all the assets of the person concerned.
5. Nothing contained in this section shall prevent the assessing authority from making an assessment of tax payable by the dealer in accordance with other provisions of the Ordinance and the dealer shall be liable to pay tax in accordance with other relevant provisions of this Ordinance.

   Provided that any deduction made in accordance with the provisions of this section shall be treated as a payment of tax on behalf of the selling dealer, and credit shall be given to him for the amount so deducted on the production of the certificate, referred to in sub-section (9) in the tax return of the relevant period or the assessment made, as the case may be, and any amount found in excess of tax due shall be refunded to the selling dealer.

6. No deduction of any amount shall be made under this section if seller of goods is not a dealer, but the onus to prove that goods have been purchased from a person other than a dealer shall lie on the person responsible for making payment, failing which it shall be deemed that goods have been purchased from a dealer.

   Explanation: - For the purpose of this section, assessing authority in relation to person responsible for making payments to the seller means the officer having jurisdiction over the place where the principal place of business of such person inside the State is located and where such person has no such place, the place where the residence of such person is located.

7. Notwithstanding anything contained in this Act, the Commissioner may, on application of a manufacturer holding eligibility certificate granted under section 4-A or section 4-AAA of the Uttar Pradesh Trade Tax Act, 1948 and enjoying facility of exemption from payment of tax under the said Act, subject to other provisions of this section , grant moratorium for payment of admitted tax computed in the manner provided in sub-section (7).
8. Where facility of moratorium for payment of admitted tax in lieu of exemption from payment of tax has been granted to a dealer under the Uttar Pradesh Trade Tax Act, 1948 or such facility may be granted to such dealer under clause (b) below, the commissioner -
   • may grant facility of moratorium for payment of the amount equal to the difference of the amount of tax payable on sales of goods in respect of which moratorium for payment of admitted tax would have been available, had this Act commenced and the amount of input tax credit relating to goods used or consumed in manufacture, processing or packing of such goods ; and
   • shall dispose of such application by an order in writing, according to provisions of the Uttar Pradesh Trade Tax Act 1948, where application of such dealer for granting moratorium from payment of admitted tax in lieu of exemption from tax is pending on the commencement of this Ordinance or where an application for granting such moratorium is presented by a dealer within the time prescribed under the Uttar Pradesh Trade Tax Act, 1948 on the commencement of this Ordinance before the Commissioner.
9. Notwithstanding anything contained contrary to in any provision of this Act, application for grant of eligibility certificate presented on a date prior to the date of the commencement of this Ordinance, before the competent authority under the Uttar Pradesh Trade Tax Act 1948 shall be disposed of under the Uttar Pradesh Trade Tax Act 1948.
10. An application for granting facility of moratorium for payment of admitted tax under sub-section (1), may be presented to the Commissioner by an eligible dealer within a period of sixty days from the date of the commencement of this Act or within a period of sixty days from the date on which eligibility certificate is granted to such dealer, whichever expires later.
11. The commissioner shall, after giving reasonable opportunity of being heard to the dealer, dispose of the application under sub-section (4) by passing an order in writing.
12. Dealers holding eligibility certificate shall be eligible for the facility of moratorium for payment of amount of tax to the extent and for the period whichever expires earlier, as under:
    • 1. in case of a dealer under sub-section (1) to the extent of amount of exemption from tax mentioned in the eligibility certificate less aggregate of amount of exemption from tax as has been availed before the date of the commencement of this Act; and
      2. in case of a dealer under sub-section (2), to the extent of aggregate amount of one hundred percent of the amount of exemption from tax mentioned in the eligibility certificate and fifty percent of the amount of fixed capital investment mentioned in the eligibility certificate less aggregate of such amount in respect of which facility for moratorium for payment of tax has been availed during the period before the commencement of this Act.
    • for one hundred and thirty percent of the remaining period of exemption from tax as on the date of the commencement of this Act, out of the maximum period mentioned in the eligibility certificate.

    Explanation: Aggregate amount of exemption from tax includes amount of exemption from tax payable under the Central Sales Tax Act, 1956.

13. In case of manufacturing units which were enjoying facility of exemption immediately before the commencement of this Act, amount of tax for which moratorium for payment may be granted, shall be the amount equal to the difference of amount of exemption from tax would have been available in accordance with relevant notification under the Uttar Pradesh Trade Tax Act, 1948, had this Act not commenced and partial amount of input tax credit relating to goods used or consumed in manufacture, processing or packing of such goods, in the ratio of amount of tax exemption to the total amount of tax payable in respect of the goods sold.
14. Where any manufacturing unit was entitled for partial exemption from tax in different years under the Uttar Pradesh Trade Tax Act, 1948, for the purpose of extended period under sub-section (6) partial exemption shall be deemed equal to the extent for which unit was entitled in the final year of exemption from tax under the Uttar Pradesh Trade Tax Act, 1948, had this Act not commenced.
15. Facility of moratorium for payment of tax shall be subject to the following conditions:
    • Facility shall be limited to the amount of tax and for the period mentioned in sub-section (6) of this section.
    • Payment of amount of tax for each assessment year, shall be deferred for a period of five years and such period of 5 years shall be computed from 1st May of the assessment year succeeding the assessment year to which such amount of tax relates.
    • Facility shall be available to only such manufacturer who creates first charge on its property in favour of the State Government sufficient to cover the amount of tax in respect of which moratorium has been granted.
    • The amount of tax, payment of which has been deferred, relating to each assessment year, shall be paid by the manufacturer in a lump sum within one month of the expiry of the period of moratorium;
    • Facility shall not be admissible in respect of the amount of tax assessed in excess of tax admittedly payable.
    • Facility shall be admissible in respect of tax on sale of goods mentioned in the eligibility certificate and in the circumstances in which exemption from payment of tax on turnover of sale manufactured goods is admissible.
    • If the amount in respect of which moratorium has been granted is not paid within the time specified in clause (d), the manufacturer shall in addition to penalty, if any, be liable to pay interest in accordance with sub-section (2) of section 33 for the entire period during which the amount remained deferred and subsequently till the date of its payment.
16. The Commissioner may, after giving reasonable opportunity of being heard to the dealer, withdraw facility of moratorium in the following circumstances:
    • Where any dealer is found to have concealed any turnover of sale or purchase with a view to evade payment of tax either under this Ordinance or under the Central Sales Tax Act, 1956; or
    • Where the dealer, without a reasonable cause, fails to pay any amount of tax or penalty due from him either under this Ordinance or under the Central Sales tax Act, 1956; or
    • Where the dealer has acted in contravention of any of the conditions of eligibility certificate; or
    • Where dealer has discontinued business; or
17. The moratorium shall cease and the total amount payment of which has been deferred, shall become payable-
    • on the date of discontinuance of business where the manufacturer discontinues business within the meaning of explanation under sub-section (6) of section 3;
    • on the date on which dealer violates any of the conditions subject to which eligibility certificate has been granted;
    • on the date on which order for withdrawal of facility under sub-section (8) is passed by the Commissioner,

      and shall be paid in lump sum within three months of its so becoming payable.