The Hindu Business Line : Value additions in VAT definitions

ON the first day of a full week, after a hurried birth before the weekend, the VAT baby is showing signs of fast metabolism, with Rules and Schedules in the `breaking news' category. Thus, it is no surprise that on www.stvat.com, a site that has been avidly working in the value-added tax field, there are many `updated' and `new' highlighters against the VAT laws of many States. To value-add to your tax literacy, here's an attempt to put together a few definitions drawn from different State Acts and Rules, accessible at the URL.

What is `business'? It includes "any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture whether or not such trade, commerce, manufacture, adventure or concern is carried on or undertaken with a motive to make gain or profit and whether or not any gain or profit accrues therefrom," and there's more, according to the Andhra Pradesh Value Added Tax Ordinance, 2005.

While on `business,' it's interesting to note that Bihar's VAT law adds the clause, "irrespective of the volume, frequency, continuity or regularity," to remove doubts. It also includes "any transaction involving goods, whether original or second hand, unserviceable, obsolete or discarded goods, mere scrap or waste material," though such goods have not been defined.

In contrast, Zambia's VAT Act of 1991 (www.acts.co.za) doesn't seem to have a definition of `business' though `business day' is explained as "any day which is not a Saturday, Sunday or public holiday." In their Act, you'd also find phrases such as `second-hand goods' and `tax fraction' too defined.

VAT law here too, especially the Rules, includes a definition of `tax fraction' as "fraction calculated in accordance with formula, r / (r+100) where `r' is the percentage rate of tax applicable to the sale." Delhi law defines `accountant' as a CA, to gladden the hearts of professional accountants. It also defines `adequate proof' as "such documents, testimony or other evidence as may be prescribed."

Returning to the AP law, `goods vehicle' means "any motor vehicle constructed or adapted for the carriage of goods, or any other motor vehicle not so constructed or adapted when used for the carriage of goods solely or in addition to passengers and also includes every wheeled conveyance." Broad enough, this is, to include hovercraft too, because of the catchall wording in the first part of the definition.

In Himachal Pradesh, `document' includes "title deeds, writing or inscription, statement of account including electronic data, computer programme, computer tapes, computer disc, computer floppy, electronic media and the like that furnishes evidence." In Kerala, `document' includes "written or printed records of any sort, title deeds and electronic records as defined in Clause (t) of sub-section (1) of Section 2 of the Information Technology Act, 2000." Punjab includes `photographs, and video tapes,' but Bihar defines the word as "a document as defined under section 29 of the Indian Penal Code, 1860" and includes "books of accounts maintained in the course of business," besides electronic data and so on.

Some value-additions, these are, to your stock of VAT definitions. Still there's lot more to state about States' VAT. So, watch this space!

ExParte@TheHindu.co.in

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