Had posted some questions on LBT for study as to test knowledge. Here are the answers to those questions.
Answers contributed by +Kishor Lulla
1. A has imported goods & sold goods to B who is in corporation area. B has taken the delivery of goods (or entry of the goods by B). Who is liable to pay LBT? (S.2 (31A) ).
Ans – A is liable.
2. (a). Whether software downloaded by a dealer inside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31A)).
Ans – Yes
(b). Whether software downloaded by a dealer outside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31A)
Ans – No
(c). In case of above (b) if software is transferred through mail by branch outside corporation area to Head Office within Corporation area ?
Ans – Yes
(d). Whether cable operator/ cinema theatre who downloads programmes / pictures from satellite within corporation area & show them to viewers by charging specific amount, are liable to LBT?
Ans – Yes. But contrary view its quite possible.
3. A dealer outside corporation area brings taxable goods within corporation area for keeping in cold storage for any duration. Whether the said dealer is liable to pay LBT? Whether cold storage owner is liable to pay LBT?
Ans – No
4. A goldsmith purchases old ornaments from the unregistered person who gives in writing that the said ornaments were previously purchased within corporation area only. Whether goldsmith is liable to pay LBT?
Ans – No, Because the goldsmith cannot prove that goods were bought by unregistered person from outside corporation area.
5. A dealer applied for permission to pay lump sum amount but till the end of the year, permission is not received. Whether dealer can pay tax voluntarily as deemed permission? Whether he is liable to pay interest for delayed payment? (R.27)
Ans – There is no specific provision of deemed permission but there should not be any problem if tax is paid within time.
6. Whether Advocates, C.A., Doctors, are liable to pay LBT?
Ans – As per provisions, professionals are liable but as per various decisions by Apex Court, they may not be held liable.
7. An individual purchases building material from outside LBT area for the purpose of construction of his own residence ? Whether liable to pay LBT? (S.2(5A) S.2(16A) (S.152B)
Ans – No.
8. Commissioner of corporation purchases car from outside LBT area for his personal use. Whether he is liable to pay LBT? (S.2(5A) S.2(16A) (S.152B)
Ans – No.
9. Whether Hospital, Trust & Educational institutions are liable to pay LBT? (S.2(16A)
Ans – Not liable but contrary view is quite possible.
10. A dealer purchases car for the purpose of business from a dealer outside LBT area. Delivery is taken outside LBT area. The company brings vehicle for RTO registration inside LBT area on behalf of customer. After registration, again delivery is given outside LBT area. Who is liable to pay LBT? Or nobody is liable to pay LBT? (S.152B) (R.3).
Ans – Company is not liable. If purchaser falls under the definition of the dealer, he will be liable.
11. Whether proportionate or ratio method can be applied for claim of setoff if exports are made out of local & imported purchases which are mixed? (R.32 (2)(a).
Ans – Yes.
12. As per R.28 (5) the deduction for rejection of goods is allowed in case of export? Whether same type of deduction is available if the rejection is made out of imports?
Ans – No.
13. Whether the support of decisions under BST Act, MVAT Act & CST Act can be taken for LBT Act? e.g. While interpreting the meaning of ‘ no change in any condition or appearance of the goods in R.28, whether decisions under above mentioned Acts can be applied ?
Ans – Yes.
14. Whether S.2(70C) - definition of ‘Value of Articles’ , applies to LBT since the words used are ‘Octroi or Cess’?
Ans – No.
15. Whether LBT can be collected separately from customer? (Rule 49 (1))
Ans – Yes.
16. Whether appeal can be filed against issuance of R.C. or cancellation of R.C? ( S.406, R.36 to 38)
Ans – No, because there will not be any demand notice and as per Sec.406 (7), appeal is to be filed within 15 days from the date of demand notice.
17. What is the meaning of ‘satisfaction of the commissioner’ and ‘on a regular basis’ as mentioned in R.32(1) 1st proviso?
Ans – Debatable
18. LBT is paid in Dec 13. Export made in March 14. Whether amount of 90% setoff can be reduced from the payment for the month of March 14? (R.32) What will be the position if export is in April 2014?
Ans – Amount of setoff can be reduced in both situations.
19. What is the meaning of ‘otherwise than under a contract of sale’ mentioned in R.32(1)?
Ans – Not clear.
20. What is the meaning of ‘the commissioner may allow him’ mentioned in R.32(1) 1st and 2nd proviso?
Ans – Discretionary power without any reason.
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Answers contributed by +Kishor Lulla
1. A has imported goods & sold goods to B who is in corporation area. B has taken the delivery of goods (or entry of the goods by B). Who is liable to pay LBT? (S.2 (31A) ).
Ans – A is liable.
2. (a). Whether software downloaded by a dealer inside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31A)).
Ans – Yes
(b). Whether software downloaded by a dealer outside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31A)
Ans – No
(c). In case of above (b) if software is transferred through mail by branch outside corporation area to Head Office within Corporation area ?
Ans – Yes
(d). Whether cable operator/ cinema theatre who downloads programmes / pictures from satellite within corporation area & show them to viewers by charging specific amount, are liable to LBT?
Ans – Yes. But contrary view its quite possible.
3. A dealer outside corporation area brings taxable goods within corporation area for keeping in cold storage for any duration. Whether the said dealer is liable to pay LBT? Whether cold storage owner is liable to pay LBT?
Ans – No
4. A goldsmith purchases old ornaments from the unregistered person who gives in writing that the said ornaments were previously purchased within corporation area only. Whether goldsmith is liable to pay LBT?
Ans – No, Because the goldsmith cannot prove that goods were bought by unregistered person from outside corporation area.
5. A dealer applied for permission to pay lump sum amount but till the end of the year, permission is not received. Whether dealer can pay tax voluntarily as deemed permission? Whether he is liable to pay interest for delayed payment? (R.27)
Ans – There is no specific provision of deemed permission but there should not be any problem if tax is paid within time.
6. Whether Advocates, C.A., Doctors, are liable to pay LBT?
Ans – As per provisions, professionals are liable but as per various decisions by Apex Court, they may not be held liable.
7. An individual purchases building material from outside LBT area for the purpose of construction of his own residence ? Whether liable to pay LBT? (S.2(5A) S.2(16A) (S.152B)
Ans – No.
8. Commissioner of corporation purchases car from outside LBT area for his personal use. Whether he is liable to pay LBT? (S.2(5A) S.2(16A) (S.152B)
Ans – No.
9. Whether Hospital, Trust & Educational institutions are liable to pay LBT? (S.2(16A)
Ans – Not liable but contrary view is quite possible.
10. A dealer purchases car for the purpose of business from a dealer outside LBT area. Delivery is taken outside LBT area. The company brings vehicle for RTO registration inside LBT area on behalf of customer. After registration, again delivery is given outside LBT area. Who is liable to pay LBT? Or nobody is liable to pay LBT? (S.152B) (R.3).
Ans – Company is not liable. If purchaser falls under the definition of the dealer, he will be liable.
11. Whether proportionate or ratio method can be applied for claim of setoff if exports are made out of local & imported purchases which are mixed? (R.32 (2)(a).
Ans – Yes.
12. As per R.28 (5) the deduction for rejection of goods is allowed in case of export? Whether same type of deduction is available if the rejection is made out of imports?
Ans – No.
13. Whether the support of decisions under BST Act, MVAT Act & CST Act can be taken for LBT Act? e.g. While interpreting the meaning of ‘ no change in any condition or appearance of the goods in R.28, whether decisions under above mentioned Acts can be applied ?
Ans – Yes.
14. Whether S.2(70C) - definition of ‘Value of Articles’ , applies to LBT since the words used are ‘Octroi or Cess’?
Ans – No.
15. Whether LBT can be collected separately from customer? (Rule 49 (1))
Ans – Yes.
16. Whether appeal can be filed against issuance of R.C. or cancellation of R.C? ( S.406, R.36 to 38)
Ans – No, because there will not be any demand notice and as per Sec.406 (7), appeal is to be filed within 15 days from the date of demand notice.
17. What is the meaning of ‘satisfaction of the commissioner’ and ‘on a regular basis’ as mentioned in R.32(1) 1st proviso?
Ans – Debatable
18. LBT is paid in Dec 13. Export made in March 14. Whether amount of 90% setoff can be reduced from the payment for the month of March 14? (R.32) What will be the position if export is in April 2014?
Ans – Amount of setoff can be reduced in both situations.
19. What is the meaning of ‘otherwise than under a contract of sale’ mentioned in R.32(1)?
Ans – Not clear.
20. What is the meaning of ‘the commissioner may allow him’ mentioned in R.32(1) 1st and 2nd proviso?
Ans – Discretionary power without any reason.
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