UP - VAT - ACTIONS NECESSARY FOR SMOOTH TRANSITION TO NEW SYSTEM OF TAX COLLECTION - “VALUE ADDED TAX”

[MUKUL GUPTA, Tax Advocate]

The State of U.P. has ultimately joined w.e.f. 1^st Jan, 08 the main stream of all other VAT compliant States and Union Territories in India. After getting consent from the President of India, the Governor of Uttar Pradesh had finally issued the Ordinance known as 'The Uttar Pradesh Mulya Samvardhit Kar Adhyadesh, 2007' (Uttar Pradesh Adhyadesh Sankhya 37 of 2007) NO. 2643 (2)/79-V-I-07-2 (ka) 41/2007 Lucknow: Dated: December 20, 2007. This Ordinance which is also called as 'The Uttar Pradesh Value Added Tax Ordinance, 2007', shall come into force on 1^st January 2008 as per the Notification No. KA.NI-II-3121/XI-9(197)/07-UP ORDI-37-207-ORDER (14)-2007 dated 24.12.2007. The consequent Rules had also being issued, so as to implement the Provisions of the Ordinance in whole of the State of Uttar Pradesh.

Concept of VAT and Set-off/Input Tax Credit:

State level Value Added Tax (VAT) is a multistage tax, levied on value added at different stages of distribution of a commodity with-in the respective State. The essence of U.P.VAT is in providing set-off for the tax paid on purchases with-in the State of U.P., and this is given effect through the concept of input tax credit/rebate. This input tax credit in relation to any period means setting off the amount of input tax by a registered dealer against the amount of his output tax on Taxable Local Sale, Interstate Sale and Export out of India.

The Value Added Tax (VAT) is based on the value addition to the goods, and the relat­ed VAT liability of the dealer is calculated by deducting input tax credit from tax collected on sales during the payment period (say, a Month or a Quarter).

Every dealer shall be liable to pay tax under this Ordinance, for each assessment year, on his taxable turnover of sale or purchase or both, of taxable goods, at such rates and at such point of sale or purchase as provided under section 4 or section 5.

I am confining the discussions in the present Article, only to the procedural actions which are necessary to be taken by an assessee-dealer for smooth and hassle-free business due to the transition from old tax regime to this new system tax collection on Sale of Goods effective from 1^st January 2008. I am not going into the legal intricacies, procedural lacunas, anomalies or difficulties which are present in the newly introduced system of VAT, which may be separately addressed in the coming months when the Provisions are practically applied by the dealers.

1.  COLLECTION OF TAX PAYER'S IDENTIFICATION NUMBER:

Every registered dealer should collect TIN Number from its Registering/ Assessing Authority, where his principal place of business is situated in the State of U.P. These TIN Numbers have already been provided by the Department of Trade Tax which shall now be called as Commercial Tax Department w.e.f. 1^st Jan 08.

As per Provision of Section 20 Sub-Section (1) every registered dealer has to quote his Taxpayers' Identification Number, allotted to him on his registration certificate, on all:

(i) correspondence made,

(ii) statement and return submitted,

(iii)  information furnished,

(iv) documents issued by him and

(v) on each copy of treasury challan while depositing amount of tax, fee or any other dues.

The Registered Dealer shall now be identified by its single allotted number known as Taxpayers' Identification Number, instead of earlier two registration numbers for Local registration and another for Central registration. The date of effectivity of the Taxpayers' Identification Number will be the original date of effectivity of earlier local registration certificate.

Every dealer who possesses Permanent Account Number allotted under the Income-Tax Act, 1961, shall mention such number on annual return of turnover and tax and shall furnish such number whenever required by any Authority.

2. TAX INVOICE :

 In respect of all taxable goods, except Non VAT Goods and exempted goods, every registered dealer except a dealer who opts for payment of tax or a lump-sum (Composition Scheme), where such dealer is liable for payment of tax on sale of any such goods, shall, while making sale of the goods, issue to the U.P.registered purchasing dealer, a tax invoice in the prescribed form and manner containing such particulars as may be prescribed and such selling registered dealer shall charge separately on such tax invoice the amount of tax payable by him.

The tax invoice must be authenticated under the signature of authorised signatory. Such authorised signatories have to be ascertained by the registered dealer and informed in prescribed manner to the Commercial Tax Department. More than one authorised signatories may be appointed.

The State Government has suggested a format of Tax Invoice. The Tax Invoice must contain the name and address alongwith tax payer identification number of selling as well as purchasing dealer.

The Tax Invoice must be prepared in three copies marked as 'Original, Duplicate and Office Copy'. Additional copy can also be maintained and kept exclusively by the selling dealer as an extra copy or account copy which should be marked distinctively on the right hand top corner of the Tax Invoice.

The seller shall deliver Original and Duplicate marked Tax Invoice to the purchaser of the goods. The copy of the Tax Invoice marked as Duplicate shall accompany the goods during transportation. Every registered dealer should ensure that the Duplicate marked Tax Invoice in original should be available with the goods whenever checked by the Mobile Squad Teams of the Commercial Tax Department, otherwise there will be a violation of Sub-Section (2) of Section 22 of the VAT Ordinance.

 Input Tax Credit to the purchaser of taxable goods would be available only on the basis of tax invoice marked Original as maintained by the purchasing dealer.

 As per the Circular 472 dated 26^th December 2007 the Commissioner have allowed the continuation of serial numbers presently followed on Tax Invoice, Sale Invoice, Bill, Transfer Invoice, Cash Memo or Credit Memo till the end of 31^st March 2008. So, no new books for the above referred documents needs to be started from 1^st January 2008. Other necessary details and informations must be given as per the provisions discussed in the VAT Act & Rules.  If all the necessary details of the Tax Invoice as prescribed under the VAT Law are available on the Central Excise Invoice then the same may be treated as Tax Invoice if it is pre-authenticated by the authorised signatory, otherwise the new Tax Invoice needs to be printed afresh.

As per Provision of Sub-Section (8) of Section 22, no registered selling dealer can issue a tax invoice to such purchaser unless the purchaser has furnished his name, complete address and TIN Number. In Sub-Section (7) of Section 22, it has been made incumbent on the purchaser while making purchase of any goods from a registered dealer to provide his name, address and TIN Number to the selling dealer.

3. SALE INVOICE:

A registered dealer selling and realizing tax on Non VAT Goods i.e. goods covered under Schedule-IV as per Section 4(1) (c) for the goods like spirits and spirituous liquor, rectified spirit, molasses, arms, petrol, diesel, furnace oil, natural gas, bhang and opium etc. has to be issuing sale invoice and not a tax invoice. Thus, the dealers dealing in such goods will not be able to get the benefit of Input Tax Credit.  The selling dealer has to charge the amount of tax separately in the sale invoice.

If a registered dealer sells any taxable goods except Non VAT Goods to any un-registered dealer, it has to issue a sale invoice and not a tax invoice. The sale invoice has to be issued after mentioning the name, complete address and other particulars of the purchaser. 

The sale invoice shall be separately issued for central sales from a separate sales invoice book.

4. CASH MEMO OR BILL:

The taxable dealer shall issue a cash memo or bill in addition to tax invoice or sale invoice, if such (i) cash memo or bill is required by the purchaser or (ii) such bill/ cash memo is required under any other law or (iii) is issued in-accordance with the practice of the selling dealer in respect of goods sold. The cash memo/ bill shall also be issued by those dealers who opts for payment of amount of tax in lump-sum under the composition scheme.

The selling taxable dealer has to issue cash memo/bill for every single sale where the sale value exceeds Rs. 250/-.

The Office Copy of (i) tax invoice (ii) sale invoice or (iii) cash memo or bill has to be preserved by the selling dealer as well as by the purchasing dealer atleast for a period of Eight Years from the closure of the Financial Year to which such sales pertains.

As per Rule 43(7) there is requirement to maintain bill book and cash memo book separately for the sale of (i) taxable goods other than non VAT goods and (ii) any goods except taxable goods. If a dealer wants to maintain one single book for cash memo and bill together then he must maintain atleast two separate books for the two different mutually exclusive categories/nature of goods mentioned in sub-clause (i) and (ii) above.

5. TRANSPORT MEMO:

 Every registered dealer consigning or delivering any goods or class of goods as may be notified by the State Government whether by reason of sale or otherwise shall issue to the purchaser or consignee person of goods, a transport memo in Form-XXI which has to be obtained on payment of Rs. 5/- per form from the Assessing Authority as per the Provisions of Section 21 (4) read with Rule 40.  This transport memo is something like Form-49 of the erstwhile U.P. Trade Tax Act and the similar procedure for fresh issue of blank forms and their use as well as maintenance of records has to be adopted under the VAT Act. No such notification prescribing the transport memo in Form XXI has yet been issued by the Commissioner, Commercial Taxes, U.P.

6. CHALLAN OR TRANSFER INVOICE:

Every dealer liable to pay tax while consigning or delivering any taxable goods to another dealer, whether as a result of sale or otherwise, has to issue to the purchaser or consignee of goods, a legible Challan or Transfer Invoice in accordance with Rule 41. The requirement of Challan or Transport Memo is dispensed with whenever the provisions of Transport Memo as per Section 21 Sub-Section (4) are applicable.

These Challans or Transfer Invoice shall be issued in three copies marked original, duplicate and triplicate from a bounded book and each copy of Challan or Transfer Invoice shall contain following particulars in respect of goods delivered or dispatched :

(i)  Name and Address of the dealer.

(ii)   Name of branch or depot.

(iii)  Taxpayer's Identification Number (Registration Number) of dealer   consigning or delivering goods.

(iv) Book Number.

(v) Serial Number.

(vi)  Date.

(vii)  Signature of the authorised person who has authenticated the Challan or invoice.

(viii) Name and address of the dealer or person to whom goods are   delivered or consigned.

(ix) Taxpayer's Identification Number of consignee dealer, if any.

(x)   Sale or Stock Transfer.

(xi)  Time of removal of goods in case of manufacturer.

(xii) Following details in respect of goods delivered or consigned,

(a) Description of goods,

(b)  Identification mark or batch number, if any,

(c) Quantity or measure of goods,

(d)  Number of packets,

(e)  Actual or estimated value of goods.

(xiii)  Tax Invoice or Sale Invoice number and date (if issued at the time of   sale).

(xiv)  Mode of Transportation.

(xv)  Signature and Status of person issuing Challan or Transfer Invoice.

7. PRINTING OF SERIAL NUMBER AND MAINTAINING IN BOUNDED BOOK OF FIFTY EACH FOR TAX INVOICE, SALES OR PURCHASE INVOICE, CASH MEMO OR BILL & CHALLAN OR TRANSFER MEMO:

     As per the Provisions of VAT Act & Rules from 1^st January 2008 the above documents must start from serial number 001 and should be kept in bounded book form containing fifty such documents in ascending order. The serial number alongwith book number must start from 001 for each new Assessment Year. If the invoice or challan are issued and maintained manually then the third carbon copy titled as office copy/ triplicate copy should not be detached from the bounded book.

As per the Circular 472 dated 26^th December 2007 the Commissioner have allowed the continuation of serial numbers presently followed on Tax Invoice, Sale Invoice, Bill, Transfer Invoice, Cash Memo or Credit Memo till the end of 31^st March 2008. So, no new books for the above referred documents needs to be started from 1^st January 2008. Other necessary details and informations must be given as per the provisions discussed in the VAT Act & Rules.  If all the necessary details of the Tax Invoice as prescribed under the VAT Law are available on the Central Excise Invoice then the same may be treated as Tax Invoice if it is pre-authenticated by the authorised signatory, otherwise the new Tax Invoice needs to be printed afresh.

Tax invoice, sale invoice, bill or cash memo must contain full name and address of the selling dealer, name and address of the Branch and Depot from where the goods are being sold, Tax Payer's Identification Number of the selling dealer, Tax Invoice Book Number, Sale Invoice Book Number, Cash Memo Book Number or Bill Book Number, as the case may be, tax invoice serial number, sale invoice serial number, cash memo serial or bill serial number as the case may be shall be in printed form.

In addition the tax invoice must be duly pre-authenticated under the signatures of the authorised signatory, prior information about the authorised signatory is to be provided to the Commercial Tax Department in the prescribed manner.

In case the tax/sale/purchase invoice, cash memo or bill and challan or transfer invoice as referred above are issued and maintained in computer then the office copy/triplicate copy should be generated after the end of every working day and such hard copies as signed by the authorised signatory in original shall be kept in bounded book form for every month not less than in sets of fifty each. As per the latest Circular No. 472 dated 26^th December 2007 the Commissioner has still maintained the requirement of keeping hard copies of the documents even if they are issued on computer. Where these invoices are prepared on computer then such invoices should be prepared using specialized data base of the assessee, no specific software has yet been prescribed under the new system. 

The tax invoice, sale invoice, bill, cash memo and purchase invoice must provide the name and address of the purchaser, tax payer's identification number of purchaser (if any), description of the goods, quantity or measure of goods, value of goods, other charges (if any), amount of discount (if any), rate of tax, amount of tax charged, total amount of tax invoice and signature of the person issuing the tax invoice, sale invoice, bill, cash memo and purchase invoice etc.

The Tax Invoice, Challans or Transfer Invoice should be signed and pre-authenticated by the authorised signatory appointed by the dealer. This authentication will be in addition to the signatures of the issuing person.

8. DOCUMENTS NECESSARY ON ROAD DURING TRANSPORTATION OF GOODS:

As per the Provision of Sub-Section (6) of Section 21 the goods under transportation must be accompanied by the original copy of the 'transport memo' as provided in Section 21(4) where-ever prescribed, Challan or transfer invoice in Original & Duplicate provided in Section 21(5) which should be completed in all respects. On the duplicate copy of Challan or transfer invoice the transporter shall get the receipt of the goods delivered to the consignee. Atleast Duplicate copy of Tax Invoice/ Sale Invoice/ Bill/ Cash Memo should also accompany the goods during their movement.

As per Section 21(7) the transporter is required to fill in the relevant columns of transport memo, Challan or transfer invoice and shall deliver the same to the consignee dealer alongwith the goods. As per Circular No. 472 dated 26^th December 2007 which was issued yesterday evening, it has been clarified by the Commissioner that if anyone of the valid Tax Invoice or Sale Invoice, Challan or Transfer Invoice or Transport Memo (for specified transactions/goods) as issued by the registered dealer would be available then the goods would not be detained by the Mobile Squad Authorities.

9. MAINTENANCE OF ACCOUNTS AND DOCUMENTS INCLUDING REGISTERS:

As per the Provision of Section 21 Sub-Section (1) every taxable dealer shall keep and maintain a true and correct account showing value of the goods sold and brought by him. A manufacturer has also to maintain stock books in respect of goods used or consumed in manufacture as well as the products obtained at every stage of production.

The Commissioner or the State Government may relax the requirement of maintaining manufacturing records as mentioned above incase the turnover of a manufacturer does not exceed Rs 25 Laks.

The accounts, documents and stock books are required to be preserved by a dealer according to Rule 39 for a period of Eight Years after expiration of Assessment Year to which such books, accounts or documents relates. In case any proceedings are pending then the dealer has to maintain books, accounts or documents beyond period of Eight Years till such proceedings are finalized.

Every assessee dealer has to keep separate account of purchase, sale, receipt and dispatch of goods, if he disposes of taxable goods in more than one of the following ways:

(i) makes sale of goods inside the State; or

(ii) consigns goods to other dealers for sale inside the State; or

(iii) makes sale of goods in the course of interstate trade or commerce; or

(iv) makes sale of goods in the course of the export of the goods out of or in the course of the import of the goods into, the territory of India; or

(v) consigns goods outside the State otherwise than as a result of   sale.

Thus as per Provision of Section 21(10) separate accounts by the dealer has to be made for above-referred different nature of goods.

As per Provision of Section 21(11) a register for claim of Input Tax Credit in respect of every tax period has to be maintained. According to Rule 28 & 29, for the purpose of computing admissible amount of tax credit a register in respect of every purchase of goods made from inside the state of U.P. has to be maintained.   If a dealer purchase any goods from outside the state also then he is also required to maintain separate accounts, such dealer has to maintain particulars relating to use, consumption or disposal of such goods in accordance with Rule 29 (2).

As per the requirement of Rule 28 & 29 (4) the dealer has to maintain  commodity-wise accounts of (i) all goods purchased and procured by him from within the state and outside the state separately (ii) goods used or consumed by him in manufacture, processing or packing (iii) finished goods manufactured or processed or packed.

Incase the amount of tax charged or tax payable is more or less in the tax invoice then the due amount of tax as per VAT Law, then both the transacting dealers has to issue credit and debit notes within a period of 30 days of the transaction, so as to adjust such differential amount in their books of accounts. This is necessary in the scheme of VAT Law.

The adjustment of goods returned or rejected by purchaser would be allowed if such event takes place within six months from the date of sale and the necessary credit and debit notes are issued and recorded by the transacting parties. The adjustment in sales would be made in the assessment year in which goods are actually returned or rejected and not in the assessment year in which the goods were actually sold, this is a change in the policy from erstwhile U.P. Trade Tax Act.

Incase a dealer assessee maintains or keeps books, accounts or documents in a computer, then he has to have also to maintain day to day printout of all such books, accounts and documents. The Government has ignored the present scenario of business and large number of transactions needing lot of paper as well as reliability of the computer data. In the modern technological development of computer science this requirement of maintaining day to day records in hard copy on paper could have been avoided, even the RBI records and other sensitive information are being kept on reliable digital memory. This provision is not in-line with the modern system as well as against the environmental issue, wherein use of paper needs to be minimized to avoid burden on our forest.            

10.  INVENTORIES TO BE MAINTAINED:

1) Every dealer liable to pay tax shall maintain inventory of goods in the following cases, which is held in stock in the same form and condition by him alongwith their quantity or measure of goods, purchase value and amount of input tax-

(a)In opening stock on the date from which dealer is liable for payment of tax under the Act or on the date of commencement of the Act i.e.1^st January 08;

(b) In closing stock on the last day of every assessment year.

(c) Goods held in closing stock on the date of discontinuance of business.

2)  Every manufacturer shall also prepare inventory of goods used or consumed in manufacture, processing or packing of any manufactured or semi finished goods held in stock on the dates given above alongwith their quantity or measure of goods, purchase value and amount of input tax.

3)  Inventory of goods purchased from within the state and from   outside the state shall be prepared separately.

4)  Amount of input tax in respect of goods held by a dealer who is liable for payment of tax from the date of the commencement of the Act i.e. 1^st January 2008, shall be computed in accordance with Provisions of Rule 19.

5) The Commissioner has prescribed the forms in which inventories shall be submitted to Assessing Authority.

6) As per Provision of Rule 20 (1) (a) the detail of opening stock of U.P. purchased goods as on 1^st January 2008 has to be submitted by the dealer in the prescribed Form-A to the Assessing Authority within 30 days i.e. on or before 30^th January 2008 in all circumstances, otherwise the benefit of input tax credit available on opening stock of will not be allowed. There is no provision for extension of time for filing of inventory details in Form-A, so necessary care must be taken to immediate prepare the opening stock detail and file it within the prescribed time. After verification of the details the Assessing Authority shall pass an order computing the input tax payable within four months.

11. VALIDATING THE REGISTRATION CERTIFICATE:

An existing registered dealer under the erstwhile U.P. Trade Tax Act has to file the requisite information for continuation of its registration Under Section 17 (5) read with Rule 32 (3) of the new VAT Act & Rules within 60 days i.e. on or before 2^nd of March 2008 in Form-VIII alongwith Form-VII the required documents before the Registering Authority or the Assessing Authority. The details of authorised signatory has to be furnished in Annexure-B to Form VII which should be filed as early as possible to facilitate the issuing of Tax Invoice under the authentication of authorised signatory. The necessary endorsement for revalidating the registration certificate i.e. Form-15 earlier granted under the U.P. Trade Tax Act would be made by the VAT Assessing Authority as per the Provisions of Sub-Section (5) of Section 17. The Commercial Tax Department may issue a new TIN Registration Certificate in Form -XI containing all the informations about the registered dealer.

12. FILING OF THE RETURNS AS WELL AS DETAILS OF INPUT TAX CREDIT ALONGWITH THE PROOF OF DEPOSIT OF TAX:

A dealer having aggregate turnover of more than Rs One Crore in assessment year or part thereof has to file a Monthly Return in Form- XXIV of turnover and calculation of tax alongwith the details of claim of Input Tax Credit and the proof of payment of tax due on the net taxable turnover. Such monthly return has to be furnished before the Assessing Authority within 20 days after the expiry of the relevant month.

The dealers having turnover less than Rs One Crore has an option to file quarterly return in Form XXIV-A for the tax period, however out of such dealers having turnover between Rs. Twentyfive Lakh and Rs. One Crore have to deposit the amount of net tax payable by them for each month of the quarter before the expiry of the period of 20 days after the month.

The list of tax invoices and sales invoices received by the dealer in respect of each purchase made by him during the month as well as the list of all tax invoices and sales invoices issued by the dealer in respect of sales affected during the tax period also needs to be submitted alongwith the return. The tax has to be deposited under the duly filled-up newly prescribed Treasurery Challan in Form-1.

13.  DEDUCTION OF TAX AT SOURCE AND FILING OF T.D.S. RETURN:

The amount of tax deducted at source as per Section 34 (1) or (7) shall also be deposited into the Government Treasurery in Form-I before the expiry of period of 20 days after the month during which such deduction of tax is made. A new requirement under this regime of VAT has been entrusted on the dealer for filing a quarterly return in Form-XXV which has to be furnished by every person responsible for making tax deduction at source under the Provision of Section 34.

Every person liable to deduct amount of tax at source shall submit to the Jurisdictional Authority, a statement in form XXVII on or before 30^th June for the preceding year.

14. FILING OF ANNUAL RETURN OF TURNOVER:

Further, a new legal responsibility has also been fixed for every dealer liable to pay tax to file on or before 31^st October, an annual return of turnover and tax in Form XXVI for the preceding assessment year alongwith the copies marked 'original' of all forms of declaration or certificates, on the basis of which exemption or concession from tax is claimed or which determine the nature of a transaction.

15. IMPORT OF GOODS FROM OUTSIDE THE STATE:

The State Government have introduced in Chapter VII under which the establishment of Check Post U/s 49 read with Rule 53 has been provided, while in Section 50 import of goods into the state by road against declaration Form-XXXVIII and under Rule 54 inspection of goods in transit has been prescribed. As per the assurance of the Government Authorities there would be no need to declare 'import of goods' at the entry check post in prescribed Form-XXXVIII i.e. 'Declaration for Import for registered dealers' and Form-XXXIX i.e. 'Declaration for Import for other than registered dealers'.

As per the provisions of the Ordinance and the Rules the Form XXXVIII or Form-XXXIX has to be carried with the goods and needs to be presented or verified from any of the Entry Check-Post. But, as per the assurance of the Government Authorities this Form XXXVIII has to be presented before the Assessing Authority after the receipt of the goods by the registered dealer. There seems to be a conflict of intention according to the assurance of the Government and actual action of the Commercial Tax Department with regard to working of checkposts in the new VAT regime.

It is also important to note that as per Rule 76, the Forms prescribed and mentioned in Column No.1 like Form-49 as Transport Memo shall be used for Form- XXI in the new VAT provisions.

   Similarly Form-31 of the earlier U.P. Trade Tax Act will be used in replacement of Form-XXXVIII i.e. 'Form of Declaration for Import for registered dealers' and Form-32 will be used in replacement of Form-XXXIX i.e. 'Declaration for Import for other than registered dealers'.

 These provisions in the new VAT Act & Rules creates a big doubt about the real intention of the State Government for their assurance given to the traders and manufacturers including the citizens of the state that the entry check posts shall be removed and only goods passing through the state of U.P. under the earlier provisions of Section 28-B of the U.P. Trade Tax Act would be liable to be declared under Form-34 and checked at some of the check posts.

16. SCHEDULE OF PRESCRIBED RATE OF TAX UNDER THE UTTAR PRADESH VALUE ADDED TAX ACT 2007:

The 'rate of tax' on various commodities has been specified in the Five Schedules under the Provisions of the U.P. Value Added Tax Act:

i) Schedule - I pertains to exempted goods which consists of 41 categories of 'general goods' alongwith another 10 commodities which are of 'local importance'.

ii) Schedule - II pertains to goods taxable @ 4% and had been categorized in three parts. Part-A pertains to 'general goods' which consist of 140 items, Part-B is the list of 'Information Technology Products' which consists of 29 items whereas  Part-C is the list of 'Industrial Inputs' and contains 270 categories of goods.

iii) Schedule - III consists of goods liable to tax @ 1% and consists of 3 categories of items i.e. Gold, Silver and other precious metals, precious and semi precious stone, and bullion and species etc.

iv) Schedule - IV consists of Non Vat Goods as provided in Section 4 (1) (c) and defined in Section 2 (v). These goods are in the nature of spirits and spirituous liquor, rectified sprits, molasses, arms, petrol, diesel, furnace oil, natural gas, bhang and opium etc.  

v) Schedule-V is for the 'residual goods' attracting tax @ 12.5%, it covers all goods except goods mentioned or described in any of the other four Schedules.

The commodity which is being sold by an assessee should be analytically examined in the light of the entries in the above referred schedules. If, the commodity does not directly find place in any of the first four schedules then it should be examined in the light of the existing interpretations made by Hon'ble Supreme Court and the Hon'ble High Court in respect to the particular commodity. The issue of classification of goods falling under a particular item of the schedule is an important issue and needs to be properly addressed in the light of the established principles of interpretations. The Commercial Tax Department under the new VAT Regime is associating he classification of the goods with HSN Code which needs to be analysed before taking final decision about the correct classification of the goods.