Recently vide Notification no. S.O. 74/H.A. 6/2003/S. 60/2010, dated 8 June, 2010 scheme for Brick Kiln owners has been amended. Under the amended scheme tax rates have been changed, in this scenario scheme of Brick Kiln Owner can be understood in easy terms.

Brick kiln owner may, opt for payment of lump sum in lieu of tax payable by way of composition at the rates given in the Table below:

I           Tax payable by Brick Kiln Owner

"Table

However, if a kiln is designed to be fired at two places, the rate of lump sum payable by the owner of such kiln shall be double of the aforesaid rates.

II          Conditions of this scheme

(a)                Lump sum tax payable shall be deemed to be tax for the purpose of application of provisions relating to assessment, use of declarations and maintenance of record relating thereto, levy of interest, imposition of penalties for offences committed under the Act, and recovery.

(b)               Once an option to pay lump sum has been exercised it shall not be withdrawn until

1. the rate of lump sum is revised; or
2. the rate of tax on goods which the lump sum dealer deal in are revised

and the lump sum dealer makes an application within 15 days of the date of the publication of the notification that he does not wish to pay lump sum at the revised rate [exception under rule 49]

(c)                A lump sum dealer shall not issue a tax invoice as defined in section 2(1) (zl).

(d)               Notwithstanding anything contained in this Chapter, the State Government may at any time withdraw the facility of making payment of lump sum in lieu of tax from anyone or more or all classes of dealers.

(e)                No Surcharge under section 7A shall be applicable in this case.

(f)                 The input tax in respect of goods purchased by any dealer from a lump sum dealer shall be nil.

III        Steps/ Conditions

(i)     Brick kiln owner shall hand over this application to the appropriate assessing authority.

(ii)   This application shall be accepted, subject to the correctness of the information furnished in this application.

(iii) The brick kiln owner exercising the option shall have to do so in respect of all the brick kilns operated by him.

(iv) The owner thereof shall be liable to make payment of lump sum for the whole year.

(v)   Exception: An owner who opts for payment of lump sum for the first time shall be liable to pay lump sum from the beginning of the month in which he exercises his option and for the period before exercising the option for the first time, he shall be liable to pay tax under the usual provisions of law.

(vi) Lump sum tax shall be payable for the whole of the month in which the application is so made.

(vii)    A brick kiln owner liable to pay lump sum shall not purchase goods at lower rate of tax under section 7(2). Also, he may make purchase of goods on the authority of declaration in Central form C. He shall disclose the use of these forms, at the time of applying for issue of declaration forms and in an annual return to be furnished in Form VAT-R8 within a month of the close of the year. He shall not be required to make use of declaration in Form VAT-D3.

(viii)   The lump sum dealer shall inform of any increase in the capacity of the brick kiln, number of Bhatti, number or size of presses etc, to the appropriate assessing authority at least 10 days in advance of the completion of such change, failing which it shall be presumed in the absence of any evidence to the contrary that the change took place from the beginning of the year in which it came to the notice.

IV        Inspection of the stock

The Commissioner or any person appointed to may inspect brick kilns of an owner liable to pay lump sum for the purpose of verification of capacity of the kiln, its status - whether being worked, fired or closed - and the stock of bricks at the kiln site in case it is closed.

V          Tax Payment

A lump sum dealer who is a brick kiln owner shall pay lump sum by

(a)                Equal quarterly instalments payable in the first 45 days of the beginning of the quarter; or

(b)               He may pay by equal monthly instalments payable on or before the 15th of each month

and shall furnish treasury receipt in respect of the payment made to the appropriate assessing authority within a week of the payment.

The amount of lump sum in their case shall not be pro rated for a period of less than a month and shall be computed on the higher side for the month in which any change in business effecting the lump sum liability takes place.

VI        Judicial Rulings

Sumer ChandSudhir Kumar, Yamunanagar Vs State of Haryana and another (2007)

29 PHT  146 (P&H)

In this case it was concluded by Punjab & Haryana High Court, that a dealer has a right to change his lumpsum payment option by making an application to the assessing authority within 15 days from the date of publication of the notification in which the revised rates are published, that he doesn’t wish to pay lumpsum at the revised rates.

It means dealer has a right to change his lumpsum payment option on the basis of 2 grounds:-

Ø      When the rate of lumpsum is revised;

Ø      When the rate of tax on the commodity in which the dealer deals in, is revised.

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