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28 Sep 2015

Relief for developers in Haryana as Rule 49A substituted vide notification dated 24-09-2015"

Earlier, on 12th August 2014 the Haryana State Government, issued a notification No. S.O. 89/H.A.6/2003/S.60/ 2014, for introducing composition scheme specifically for the builders engaged in the construction activities and inserted Rule 49A for the lump sum payment of VAT by the builders. Although, prior to 12-08-2014, the builders and the work contractors, both were covered under one rule i.e. rule 49.

Nonetheless, on 24th September 2015, the rule 49A has been substituted with newly inserted rule 49A vide Notification 23/H.A.6/2003/S.60/2015 (added with retrospective effect i.e. 01-04-2014). We have made an attempt to provide a deep insight to the recent changes made by the government in the then introduced composition scheme for the builders in Haryana. The provisions of new rule 49A in comparison to the old rule 49A are detailed as below:

Points of difference between the two versions of composition scheme:

Bases New Rule 49A (dt. 24-09-2015) Old Rule 49A (dt. 12-08-2014)
Procedure for Registration
  1. A developer opting for this scheme w.e.f.01-04-2014, shall submit an application in Form VAT-CD1 within 60 days.
  2. If a developer registers itself, after the issue of this notification, he may opt for the scheme within 30 days by submitting application.
  3. A developer already registered under this act, can exercise this option by submitting application within 30 days of the concerned F.Y.
  1. A developer already registered under this act may opt for this scheme w.e.f. 01-04-2014 and submit an application within 30 days from the date of publication of this notification dated 12-08-2014
  2. A developer applying for fresh registration may also opt for this scheme by filing an application along with registration application.
Concessional Purchases Not entitled to use declaration Form VAT D-1 for purchasing goods at concessional rate of tax from within the State No such provision for making concessional purchases.
Availability of interstate purchases
  1. Eligible to make interstate purchases subject to payment of tax at the rate of 4% on purchase price thereof and on goods purchased and or received from any place outside the State and held in stock at the time of option of the composition scheme.
  2. Further, such tax shall not be adjustable towards his composition tax liability
  1. Eligible to make interstate purchases subject to payment of tax on their purchase price at the rate applicable on the sale of such goods in the state along with interest as applicable.
  2. Further, such tax shall not be adjustable towards the composition tax liability.
Filing of Return Quarterly return in Form VAT R-13 No special form of return for the composition developers, i.e. Return as per normal provisions:
  • Quarterly Return in FORM VAT-R1
  • Annual Return in FORM VAT-R2 on or before 30th November.

Transitional Provisions: A composition developer who has opted for lump sum payment of tax under the lump sum scheme notified on the 12th August, 2014, shall be deemed to have opted for lump sum payment of tax under this scheme. In case the tax deposited under the scheme notified on the 12th August, 2014 is more than the tax liability calculated under this Scheme, the excess tax shall be adjusted against the future tax liability but no adjustment on account of such excess tax shall be allowed if the composition developer opts out of the Scheme.

For details, you may refer the Notification 23/H.A.6/2003/S.60/2015, dated 24-09-2015.