Name of the Dealer

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Name of the Dealer

Clarification Seeking on






30
-
07
-
2009

M.S.T.C Ltd.,


ROT on un
-
Serviceable Scrap purchased in auction.

30
-
07
-
2009

,Grandeur Homes Pvt. Ltd.,


.Works Contracts

30
-
07
-
2009

Bhavani Electronics &
Communications


Whether VAT is applicable on I T Z Cash Cards?

30
-
0
7
-
2009

Aacess Equipments


ROT on " Over head Cranes, Conveyors and Furnaces".

30
-
07
-
2009

Perma Steelia (In
dia) (P)
Ltd.,


ROT on " Aluminium Profile used in Curtain Wall Panel".

30
-
07
-
2009

Maa Television Network
Ltd.,


I.T.C.

30
-
07
-
2009

Vasavi Pharmaceuticals


Method to be followed for issue of "C" Forms

30
-
07
-
2009

Hemanth Printers


ROT on " Label Printed on Job work".

30
-
07
-
2009

Dekars Fire & Security
Systems (P) Ltd.,


ROT on " Design/Supply,/Installation/ testing & commissioning of Fire
Protection Systems"

30
-
07
-
2009

Sri Raghavendra Enterprises


ROT on Food items sold in running of a Canteen

30
-
07
-
2009

Dura Line India (P) Ltd.,


Whether TDS is to be deducted
from a sector specific approved SEZ.

30
-
07
-
2009

A D P (P) Ltd.,


Whether Information Technology Services are considered as "goods" or not? Or
Works contracts, if so, taxable U/Ent
ry 39 of IV Sch.?

30
-
07
-
2009

Ness Technologies (I) (P)
Ltd.,


Whether Information Technology Services are considered as "goods" or not?

30
-
07
-
2009

Madras Cements Ltd.,


I. T. C.

30
-
07
-
2009

Keith Electronics Pvt. Ltd.,


ROT on " Optical Fiber Fusion Splicer Machine".

29
-
07
-
2009

Zuari Cement Ltd


Whether pre
-
deposit of disputed tax in the case of taxing in deferment period is
to be deposited or to be defered as in the case of payment

29
-
07
-
2009

S P P Poly Pack (P) Ltd.,


ROT on " Printed/Plain Polythene Bags, Sheets, Tubes & Waste Scrap of
Plastic".

29
-
07
-
2009

Pan Electro Technic
Enterprises (P) Ltd.,


ROT on " Electrical Transformers ( Dry Type)

29
-
07
-
2009

Ratan Stationery Mart.


ROT on " Staplers, Stapler pins, Paper punch, Alpins
& Index Fick clips."

29
-
07
-
2009

Acalmar Oils & Fats Ltd.,


ROT on " Palm Stearin".

29
-
07
-
Minar Mas
ts


ROT On " Transportable Containers for Missiles and its Spare parts and
2009

Accessories".

28
-
07
-
2009

Bambino Agro Industries


Whether " Macaroni" is similar to the product " Vermi
celli".

28
-
07
-
2009

Zen Technologies Ltd.,


ROT on " Simulators".




23
-
10
-
2009

Kovi Plastics (P) Ltd.,


ROT on " Aluminium Sheet perforated, Aluminium Scrap Castings & Aluminium
Extrusion Profile".

23
-
10
-
2009

Nahnce Engineering Solutions (P)
Ltd.,


ROT On sale of Soft Ware with A.P
. & Out side A.P.

23
-
10
-
2009

Bharath Heavy Plate & Vessels
Ltd.( BHPV)


Whether Heat Exchangers designed, developed, Manufactured & delivered to ADA
will amount to sale?

23
-
10
-
200
9

C.D.R. Healthcare Ltd.,


ROT on " Air Clean/Air Ventilation systems/Air Handling Systems & Spares".

23
-
10
-
2009

Bake Zone Bakers &
Confectioneries


Whether Bakery items sold across the counter can claim I T C?







GOVERNMENT OF ANDHRA PRADESH

COMMERCIAL TAXES DEPARTMENT


PROCEEDINGS OF THE

AUTHORITY FOR CLARIFICATION AND ADVANCE RULING

(Under Section 67 o
f APVAT Act, 2005)


Present: Sri G. Lakshmi Prasad, Addl.Commissioner(Policy)



Dr. K. Raghavaiah, Addl. Commissioner(Audit & DMU )


Sri. D.Venkateswara Rao, Joint Commissioner ( Legal)


1.
A.R.Com/ 22 /2007.


Dated 30
-

07
-

2009
.


Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s M.S.T.C. Limited Visakhapatnam, (TIN 28820100562.) have filed an
application
.

II.

They

sought clarification on the following unserviceable Scrap:

1)

U/S. Vehicle Engines made of Alluminium & Iron.

2)

U/S Fuel Separator made of Alluminium & Iron

3)

U/S. Duplicators Assorted Types

4)

U/S. Printing Machines / Embossing Machines/Sealing Machine/Plotter.

5)

U/
S. Generators made of Iron

6)

U/S. Rubber Moulding Machine made of Iron

7)

U/S. Vaccum cleaners assorted

8)

U/S. Wooden Boats assorted

9)

U/S. Fire extinguishers Assorted

10)

U/S. Mobile welding Generators

11)


U/S. Fire Boats Assorted

12)

U/S. Centrifugal Casting Machine made o
f Iron

13)

U/S. Propeller Shaft Assorted made of Iron and Brass Attachments

14)

U/S. Aqua guard water filter made of Alluminium.

15)

U/S. Pumps Assorted made of Brass and Iron
.


and ruling is given as under:


II
I.

The applicant states that it is a Gov
ernment of India Enterprise and main activity
is to conduct auctions/invite tenders for sale of the materials belong to various
Government Departments/Public Sector Undertakings. They sought for clarification on
rate of tax on “various un
-
serviceable scrap

items, which includes, unserviceable pump
Assorted made of Brass and Iron” pertains to Eastern Naval Command to sell through
auction. As per Sl. No. (xi) of Explanation IV to Section 2 (10) of the APVAT Act, “
“any other Corporation, company, body or a
uthority owned or set up by or subject to
administrative control of the Central Government or any State Government” shall be
deemed to be a dealer.



As M.S.T.C Ltd., is a Government of India Enterprise, the sales of un
-
serviceable
goods including pumps i
n
open auction are liable to tax @
12.5%, since none of the
unserviceable goods, mentioned in the application for clarification, as mentioned in para
II above, is specified in the Schedules I, II, III, IV or VI
. The company is not eligible for
ITC as per s
ub
-
section (10) of Section 13 of APVAT Act.



Therefore, it is clarified that the goods

in question,

sold in auction
,

are

liable
to tax @
12.5%



Sd/
-

Sd/
-


Sd/
-

Addl.Commissioner Addl.Commissioner Jt. Commissioner.


NOTE:
-

An appeal against this proceedings can be filed before the Sales Tax Appellate
Tribunal, A.P. Hyderabad within 30 days of this ruling.


Addl./Jt.Commissioner



***








2.
A.R.Com/ 27 /2007.

Dated 30
-
07
-
2009
.


Ref:
-
1) CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
0
4
-
2005

**



O R D E R:


I.

M/s Grandeur Homes Pvt. Ltd,. Secunderabad, (TIN 28458385409 ) have
filed an application
.

II.


They sought clarification on the following:

1)

In the light of the new Clause (g) will Clause (e) survive for applicability
on goods to be pur
chased by Works Contractors taxed Under Section 4
(7)(a)(b)(c)(d) of the AP Vat Act?

2)

Is tax under Section 4 (4) applicable on purchases of constructional
materials from local un
-
registered dealers or from TOT dealers by the
above category of Works Contract
ors when none of the contingencies
envisaged under Sub Clauses to Section 4(4) are applicable?

T
he ruling is
given as under:



I
II
. The applicant is doing business of Constructing Flats, Luxury Apartments, and
selling. He opted for composition and payin
g tax @ 4% on 25% of the consideration
received for such sale, and not availing any I T C. He is procuring all building/
construction materials from local Registered dealers under VAT and TOT.


IV
. (i)


The Ruling is that Clause (e) of sub section (7)
of Section 4 of the APVAT
Act provides for levy of tax on the turnover relating to the goods purchase
d

from
the dealers in other States and from unregistered dealers in this State and used in
the execution of works contracts in the State of Andhra Pradesh
by a works
contractor
,

who has opted to pay tax by way of composition, at the rates applicable
to those goods in the schedules to the APVAT Act and the contractor is liable to pay
tax on the balance turnover
,

arrived at by deducting the aforesaid turnover
from
the total contract receipts
,

at 4% by way of composition. What is taxed under clause
(e) therefore is the turnover of deemed sale of the goods purchased from other
States or from unregistered dealers in this State. It does not seek to levy tax on
int
erstate transactions which is prohibited by clause (g). Since there is no
contradiction between the two clauses, clause (e) survives.


(ii)

The provisions of Section 4(4) of the APVAT act are attracted when a
VAT dealer purchases any goods from a non VAT deale
r and uses
those goods as inputs for goods which are exempt from tax or which
are disposed otherwise than by way of sale locally or in interstate
trade. Use of goods in the works executed by a works contractor in the
State of Andhra Pradesh is a deemed sal
e of those goods by the
contractor to the contractee under APVAT Act. Therefore the
provisions of Section 4(4) are not attracted in such cases.



***

3.
A.R.Com/ 73 /2007.


Dated 30
-

07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s

Bhavani Electronics & Communications, Governerp
et, Vijayawada,
(TIN 28080100716) have filed an application
.

II.


They sought clarification on the following:

Whether VAT is applicable on ITZ Cash Cards, which are used as just like
Bank Debit C
ards and if so, rate of tax.

II
I.

The application stated that they got dealership for ITZ Cash Cards, from M/s.
Essel Agro Pvt. Ltd,. Delhi, to sell them to customers, which are used for purchases of
Railway Tickets, for paying Dish T.V. Tents, and to oth
er purchases at some selected
show rooms, just like Bank Debit Cards. They contended that, in the said transactions,
there is no involvement of goods and it is nothing but plastic money. Hence requested to
know whether VAT is applicable to ITZ Cash Cards,
if so the rate of tax applicable them.



Only the rupee notes, sold to RBI are exempted vide entry 27 of Schedule I of the
APVAT Act. ITZ Cash Cards are not rupee notes and are sold to various customers. They
are also not specified in any of the Schedules
and hence liable to tax @12.5% under the
residuary entry of Schedule V.



Therefore, it is clarified that the ITZ Cash Cards falls under residuary entry
of Schedule V of the APVAT Act, 2005 and liable to tax @12.5%.




***

4.
A.R.Com/ 87/2007.

Dated 30
-

07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D
E R:


I.

M/s

Aacess Equipments, Gandhinagar, Balanagar, Hyderabad, (TIN 28690108779)
have filed an application and sought clarification and advance ruling on the following
items:


Rate of tax on material handling equipments “OVER HEAD
CRANES,


CONVEYORS AND FURNACES”
and ruling is given as under:


I
I.

The applicant stated that they are manufacturers of material handling equipments such
as, CRANES, CONVEYARS AND FURNACES ETC. and hence sought for rate of tax
on these goods.


The goods ‘O
verhead Cranes, and Conveyors’ are not notified in any of the
Schedules of APVAT Act, 2005 and hence falls under residuary entry of Schedule V, and
liable to tax @ 12.5%, however, the goods ‘Furnaces’ falls under item 45 of entry 102 of
IV Schedule to AP

VAT Act, and liable to tax @ 4%.


Therefore, it is clarified that, the good
s manufactured by the applicant,
“OVER HEAD CRANES & CONVEYORS” fall

under residuary entry of Schedule
V of APVAT Act, and
are
liable to tax @ 12.5%,
while

“FURNACES”
that fall
und
er item 45 of entry 102 of IV Schedule to APVAT Act, 2005 a
re

liable to tax @
4%.



***

5.
A.R.Com/ 103 /2007.

Dated 30
-

07
-

2009
.


Ref:
-

CCT’s.Ref.No: PMT/P&L/A.
R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s Perma Steelia (India ) Private Limited, Hyderabad (TIN 28360141091.) have
filed an application and sought clarification and advance ruling on the following items

The rate of tax applicable to Aluminum Pr
ofile used in “ Curtain wall Panel”
which is incorporated in the works contract, if they opt for payment of tax on the basis of
value of goods at the time of incorporation of such goods in the works executed under
sub
-
section (7) (a) of

Section 4 of AP VA
T Act, 2005
and ruling is given as under:


I
I.

Extrusion is the process by which long straight metal parts can be produced. The
cross
-
sections that can be produced vary from solid round, rectangular, to L shapes, T
shapes
,

Tubes and many other different ty
pes. Extrusion is done by squeezing metal in a
closed cavity through a tool, known as a die using either a mechanical or hydraulic press.

Aluminum Profiles

used in “Curtain Wall Panel”.
Curtain walls are typically designed
with extruded
aluminum

members, w
hich are called as
Aluminum Profiles. They fall
under HSN Code 7604.20 and are liable to tax @ 4%, as per entry 27 of the Schedule IV
to the APVAT Act.



Therefore, it is clarified that Aluminum Profiles used in “Curtain Wall
Panel
s
” with HSN Code 7604.20

falls under entry 27 of the IV Schedule to the
APVAT Act, 2005 and liable to tax @ 4%.







***

6.
A.R.Com/ 64 /2008.

Dated 30
-

07
-

2009





Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s Maa Television Network Ltd., Punjagutta, Hyderabad, (TIN 28880168557.)
have filed an application and sought clarifica
tion and advance ruling on the following
items

a.

Whether they are entitled to claim as input tax credit the 4% tax
they paid on local purchases.

b.

Whether they are entitled to claim as input tax credit the 8.5%
portion of the tax which they paid over and abov
e 4% on goods
taxable at 12.5%.


and
ruling is given as under:

I
I.

The applicant is in the business of Satellite Channel, De
-
Coders, Edit
-
Recorder,
Edit
-
Player, Edit Consol, Audio Mixer, Camera, purchase of Movie Rights, Satellite
Br
oadcasting Rights and Telecommunication Networking Equipment. They stated that
in the course of business they made purchases of among the others the business assets.
Such purchases are also made with in the state, by paying the VAT charged by the selle
rs.
Thus they are purchasing goods taxable @b 4% as well as 12.5% and hence sought
clarification on
claiming of Input Tax Credit.


I
II.

The ruling is that under the provisions of the APVAT Act only those dealers
who are registered as VAT dealers are eligi
ble to claim input tax credit subject to
the conditions and restrictions contained in Section 13 of the APVAT Act and Rule
20 of APVAT Rules. Under these provisions a dealer registered as VAT dealer is
eligible to claim input tax credit on the local purch
ases of taxable goods, which are
not included in the negative list under Rule 20, and purchased from other VAT
dealers to the extent such purchases relate to the taxable turnovers under APVAT
Act or CST Act.




***



7.
A.R.Com/97/2008.

Dated: 30
-
07
-
2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/sVasavi Pharmaceuticals, Gunfoundry, Hyderabad, (TIN 28840132927) have
filed an application and sought clarification and advance ruling on the following items

a.
Furnishing of particulars of purchase to the Department.

b.
Method to be followed for issui
ng “C” Forms”

and ruling is given as
under:


I
I.

The applicant prayed to clarify the procedure to be adopted by them in the
under mentioned circumstances:

1)

The applicant purchases goods from outside the State of A.P.

2)

The supplier Bills the applicant as and

when goods are dispatched at the
particulars rate; say for Rs. 1,00,000/
-

3)

The supplier specified to the applicant that the Goods be sold: for say Rs.
60,000/
-

4)

The supplier issues credit notes to the applicant for a sum of Rs. 50,000/
-

5)

Sometimes the goods
are supplied in a particular month and the credit notes
are given in the following month.

In the above circumstances the applicant seeks clarifications on the

following points:

I.

W
hat is the value to be shown in VAT 200 return against column 06.

(1)

Whether

the
Total Value of Invoice for the month.

(2)

Whether the total value of Invoice less the value of credit notes during the
month.

(3)

What is to be shown if the value of invoice is less than the value of the
credit notes in that month.

II The issue arisi
ng out of the above impact on the value of “C” Forms to be
issued to the supplier. The following are the issues:

(4)

Whether “C” Form is to be issued for the entire value of invoice.

(5)

Whether “C” Form is to be issued for the entire value of invoice less than
va
lue of credit notes.

(6)

What is the value for which “C” Form is to be issued if the value of credit
notes is greater than the value of the invoices in that month.

(7)

Whether it is mandatory to specify in the credit notes the invoice against
which the reduction i
n price is given.


The authority constituted by the commissioner of Commercial Taxes
under Section 67 of the APVAT Act, to clarify any aspect of the
implementation of APVAT Act has no jurisdiction to clarify on any of the
provisions under CST Act because
,

there is no enabling provisions under
any of the Sections including Section 9 (2) or 9 (2A) or 9 (2B) of the CST
Act to make the provisions relating to Advance Rulings under AP VAT
Act applicable to CST Act.


Therefore, this Authority is not inclined to g
ive ruling on the issues
raised under CST Act.



***



8.
A.R.Com/ 2 /2009.

Dated 30
-

07
-
2009





Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s Hemanth Printers, Kachiguda, Hyderabad, (TIN 28290253096) have filed an
application and sought clarification and advance ruling on the

following:


Rate of tax on “Label Pri
nting on Job Work”


II
.

The applicant submitted the following documents:


Write up on the issue.



III.
The applicant is a printer and one of the Beedi Company ordered for printing on


the Label for which paper is also supplied by
the Beedi Company, and hence

sought for clarification on rate of tax on
LABEL PRINTING ON JOB WORK
.

VI.

The ruling is that the


work of printing Labels on job work basis utilizing
the paper supplied by the customer is a works contract. The dealer
exec
uting such works contract is liable to pay tax on the value of the
goods such as ink etc. used in the work under Section 4 (7) (a) of the
APVAT Act. Alternatively the dealer can also opt for payment of tax by
way of composition at 4% on the total contract
receipts under Section 4
(7) (c) of the APVAT Act.


*********



9.
A.R.Com/ 31/2009.

Dated 30
-

07
-
2009




Ref:
-

CCT’s.
Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.

O R D E R:


I.

M/s Dekars

Fire & Security Systems Pvt.

Ltd., Ashoknagar, Hyderabad,
(TIN 28444693072) have filed an application and sought c
larification and advance
ruling on the following

and ruling is given as under:
-


I
I.

The applicants are contractors in Designing/Supply/testing & commissioning of
Fire Protection Systems for all high rise buildings & Industries which include Hydrant
System
, Sprinkler System, Medium and High velocity Water Spray System, Automatic
Smoke and Heat Detection System, Coal conveyor Detection and Emulsifier System,
Extinguishers, Gas Based Systems, and hence sought for clarification on:

1)

Wish to know the prevaili
ng tax on “ Design/supply/installation/testing &
commissioning of Fire Protection Systems
-

such as Hydrant System,
Sprinkler System, Medium and High velocity Water Spray System,
Automatic Smoke and Heat Detection System, Coal conveyor Detection
and Emulsif
ier System, Extinguishers, Gas Based Systems .

2)

Only supply/trading of imported smoke/heat detectors/Microprocessor
based panels.

3)

What is the Labor component/percentage to be considered if its works
contract (whether the unit rate for each item is inclusive

of
Design/supply/installation/labor/testing & Commissioning) ?.



I
II. The ruling is that the question w
hether a particular transaction is a sale or
works contract is a mixed question of fact and law to be determined by the assessing
authority co
ncerned independently in each case after examining the agreement
s
, invoices,
vouchers etc and appl
ying

the provisions of the Act and case law

with reference
to the
facts of the case.
The Authority for Advance Ruling will not step into the shoes of an
As
sessing Authority.
The
refore the
applicant

is requested to
file all the documents
relating to their transactions before the assessing authority concerned for
adjudication.



***



10.
A.R.Com/ 10 /2009.


Dated 30


07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.M/s Sri Raghavendra Enterprises, Vanasthalipuram, Hyderabad,
(TIN 28762137467)
have filed an application and sought clarification on the following:


Rate of tax on food items in running of
Canteen at

Sampurna Theatre,
Vanasthalipuram, in lieu of
Amendment of

Sec. 9 of APVAT Act, in G.O.Ms.No. 175,
Revenu
e, Dept. dt. 18.02.2009, and whether they are eligible for claiming of Input Tax
Credit.

II
.The applicant submitted the following documents:


Write up
on the issue
and ruling is given as under:


I
II.

The ruling is that
,

under clause (d) of sub
section (9) of Section 4 of the
APVAT Act every dealer running a restaurant, sweet stall, or any other eating
house and whose total turnover is more than Rs. Five lakhs and less than Rs. One
crore fifty lakhs per annum is liable to pay tax at 4% on his ta
xable turnover.




The dealers who are liable to pay tax under clause (d) of sub section (9) of
Section 4 of the APVAT Act are not eligible to claim input tax credit in view of the
prohibition contained in clause (h) of sub section (5) of Section 13 of th
e APVAT
Act.



11.
A.R.Com/ 1/2009.

Dated 30
-

07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s Dura Line

India Pvt. Ltd, Dwarakapuri, Visakhapatnam, (TIN 28469116821.) have
filed an application and sought clarification and advance ruling on the following :




Whether the work done for laying of pipeline to a company which is authorized
to develop

and operate a sector specific approved SEZ , at Visakhapatnam is liable for
deduction of tax in view of the inclusion of sales to EZ Developer in Schedule I where
there is no any VAT liability under APVAT Act.



.

The issue has been examined with referenc
e to the provisions of the APVAT Act
and Rules and ruling is given as under:


I
I
.

The applicant stated that are locally registered under VAT Act, to do business as
works contractor and got a allotted a pipeline laying work from Brandix India Apparel
City P
vt. Ltd Visakhapatnam, a company which is authorized to develop and operate a
sector specific approved SEZ at Atchutapuram, Visakhapatnam. The work is executing
in the SEZ. The sale of goods to SEZ Developer is included in Schedule I. The
contractee pro
posed to
deducted works

contract tax

from bills and hence sought for
clarification whether

there is a need for deduction of tax at source in view of the inclusion
of sales to SEZ Developer in Schedule I where there is no any VAT liability under
APVAT Act.


I
II
.
The facts of the case have been carefully examined. It should be noted that the tax
deducted at source cannot be equated with tax liability.

Section 22 (3) doe
s not
distinguish between works

done for different categories of contractees and different

destinations of supply, when it comes to the tax deduction at source. No exemptions
from TDS are provided under the APVAT Act. Therefore, exemption from TDS cannot
be granted even in cases where the deemed sales i.e., supplies of goods by way execution
of works contracts are exempted. Hence the Contractees, who are under the statutory
obligation to deduct tax at source in terms of Sec. 22 (3) of the APVAT Act, shall collect
tax at source at the appropriate rates. However, in case the tax liability of t
he works
contractors, from whom the tax is deducted at source, is less than the amount of tax
deducted at source, the differential amount will be refunded or adjusted against the
present or future liability.


IV.
Accordingly the application for Advance Rul
ing and Clarification is
disposed of with the ruling that the Contractees shall collect tax at source at the
appropriate rates from the Works Contractors, even if the supplies of goods by
them by way execution of works contracts are exempted under any of
the
provisions of the APVAT Act.




***









12.
A.R.Com/ 67/2008.

Dated 30
-
07
-

2009




Ref
:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s ADP Private Limited, Raj Bhawan Road,Hyderabad, (TIN 28740128436.)
have filed an application and sought clarification and advance ruling on the following

a)

Whether the applicant w
ho is engaged in development of
customized software

are taxable
under the

service tax law as “ Information Technology Services” U/
the Finance Act, 2008 be considered as ‘goods’ u/APVAT Act, 2005?

b)

Whether the activity of ADP is considered as ‘Works Contrac
t’.

c)

If the activities of ADP are considered as ‘goods,’ then would be taxable under
which entry, either u/entry No.39 of Schedule IV i.e. ‘IT software of any media’
or under entry No. 2 i.e. ‘Goods of intangible or incorporeal nature as
mentioned under re
levant schedule of APVAT Act.

d)

The date from which applicability would arise whether retrospective from April
1, 2005.

e)

Can the applicant avail Input tax credit on eligible purchases made for
development of software, if the transaction is being subject to AP
VAT by the
Advance Ruling authorities now.

f)

If the answer for above is in positive, whether would be eligible for the same
retrospectively from April,1,2005?

g)

In case, applicant is also providing taxable services along with taxable goods,
whether the applica
nt can claim input tax credit completely on common inputs?

h)

Whether the applicant can claim the refund on the excess in
put tax credit lying
unutilized
and ruling is given as under:


I
I.

The applicant stated
that the company is registered U
/VAT Act, and als
o as STP unit
under Software Technology Park in India with STPI authorities. Now ADP is engaged in
providing IT enable services and development of customized software to ADP Inc. USA
and other affiliated entities.
Hence sought

for clarification on the is
sues mentioned supra.




The Ruling is given as under:


I
II. a)
Customized software is goods for the purpose of levy of tax under APVAT Act,
as

held by the Hon’ble Supreme Court in the case of M/s. Tata Consultancy Services Vs
State of A.P., 137
STC P. 620 and Hon’ble STAT in the case of M/s. Computer Vision
Lab India

Limited Vs State of A.P., reported in 46 APSTJ P. 244


b) Whether a transaction is a sale or works contract is to be determined by the
assessing authority with reference to th
e facts of each case and the documentary
evidence relating to that case.


c) Customized Software is taxable under sub Entry (14) of Entry 39 of IV Schedule to
the APVAT Act with effect from 01.09.2005. For the period from 1.4.2005 to 31.8.2005 it
is
taxable under entry 2 of IV schedule to APVAT Act. Either under entry 39 or under
entry 2 of IV schedule to the APVAT Act the goods are taxable at 4%.

d) Clarification on the issue of classification given at (C) here above applies to the
question of th
e dates of the applicability of the entries under IV schedule to the APVAT
Act.

e) A dealer who is registered as VAT dealer under the provisions of APVAT Act
including a dealer in supplying customized software is eligible for claiming input tax
credit

subject to the conditions and restrictions specified in Sec.13 of the APVAT Act &
Rule 20 of the APVAT Rules.

f)

In case a dealer is registered as a VAT dealer with effective date of registration as
1.4.2005 he is eligible to claim ITC from that dat
e.

g)

The question whether a dealer is providing services or supplying goods taxable
under APVAT Act is a question of fact to be determined by the assessing authority with
reference to the documentary evidence available before him. Once a transaction i
s held
to be a sale of goods
,

the dealer is eligible to claim ITC if he is registered as VAT dealer
and subject to the conditions and restrictions mentioned in Sec.13 of the APVAT Act
and Rule 20 of APVAT Rules.

h) A VAT dealer can claim refund of the
excess ITC subject to the conditions
mentioned in Sec
tion
38 of the APVAT Act
, 2005
.


***


13.

A.R.Com/ 62 /2008.

Dated 30
-

07
-

2009





Ref:
-

CCT’s.

Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:




I.M/s

Ness Technologies (India) Pvt. Ltd.,Banjara Hills Hyderabad, (TIN

28560235239.) have filed an application and sought cla
rification and

advance ruling on the following items
:


a.
Whether the applicant who is engaged in development of customized
software in pursuance of contract with its parent company in USA which are
taxable under the service tax law as “ Inform
ation Technology Services” U/
the Finance Act, 2008 be considered as ‘goods’ u/APVAT Act, 2005?


b.
Whether the applicant is considered a ‘dealer’ and is required to disclose
such turnover in the returns that are filed with the CTD every month.


c.
Wheth
er the applicant who is supplying technical qualified professionals
to the customers for development of customized software at the customers
location be regarded as a dealer in “Goods” specifically when the contract
provides for payment for services and re
muneration is on the basis of hours
spent at the customers location and such services are taxable under the service
tax law as “


Information Technology Services” U/Finance Act, 2008.



d.

If the clarification to the above issues are posit
ive, whether the applicant is


eligible to avail input tax credit on the eligible purchases made for

development

of software. Further whether the applicant can claim the refund

on the excess

input tax credit

lying unutilized.




I
I.

The applicant stated that

the company is i
ncorporated under the Companies
Act, 1956, and is in the business of software, application development,
proprietary vertical
-
specific solutions, and IT outsourcing, Google an
d
Ness have entered into “ Google Inbound Services Agreement” under
which Ness would assist Google in relation to development of
Software. Further Google and Ness have mutually agreed “ statement
of works” for defining the deliverables, payment mechanism.

Hence
sought for clarification on the
issues mentioned

supra.

I
II. (i)
(a)
:


Customized

software” is goods for the purpose of levy of
tax

under APVAT Act as held by the Hon’ble Supreme Court in the
case of Tata Consultancy Services Vs State of Andhra
Pradesh (137
STC 620) and subsequently by the Hon’ble STAT in the case of
Computer Vision Labs (India)
L
td. Vs State of Andhra Pradesh ( 46
APSTJ 244).


(i)
(b)
:

Any person who carries on the business of supplying software,


whether canned or
customized, is a dealer

and he

is required to obtain

registration and file returns as per the provisions of the APVAT Act.




(ii) : The question whether a person is supplying technically qualified
professionals or the customized software de
veloped by such professionals
is a question of fact which should be answered by the Assessing Authority
concerned of the dealer with reference to the agreements entered into by
the dealer with the customers, the invoices raised on the customers,
vouchers a
nd other documentary evidence produced by the dealer.


(iii) : A dealer who registers himself as a VAT dealer under APVAT Act is
eligible to claim input tax credit subject to the conditions and restrictions
mentioned under Section 13 of the APVAT Act and R
ule 20 of the APVAT
Rules.



***





14.
A.R.Com/96 /2007.

Dated 30
-
07
-

2009




Ref:
-

CCT’s.
Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s Madras Cements Ltd., Jaggaiahpet, Krishna District, (TIN 28960205382.)
have filed an application and sought clarification and advance ruling on the
following:


Whether inpu
t VAT Credit is eligible on the following purchases for the
additional Railway siding at our own premises which will be used for transporting of
Raw materials inside the factory and Dispatch of Cement & Clinker:

1)

Material supply for the pathway and for Ball
ast for the additional Railway siding
at our own premises.

2)

Procurement of spares for overhead Electrification of our additional private
Rai
lway siding at our own premises
and ruling is given as under:


I
I.

The applicants are manufacturers of Cement having
factory located at Jayanthipuram,
Jaggaiahpet, Krishna Dist.,. They stated that they have gone for expansion of their linker
& Cement manufacturing capacity , and they have own private Railway siding in their
factory premises. The siding is being used for
inflow of materials like Gypsum and for
Fuels. Dispatch of Cement is being done by Road as well as by Rail to various places in
AP and outside the AP. They have additional Railway line the premises. Railway lines
fare forming part of their Plant & Machiner
y, which will be used for inflow of input
materials for manufacture and dispatch of Clinker and Cement. Hence they sought for
clarification

whether input VAT Credit is eligible on the purchases for the additional
Railway siding at their own premises whi
ch will be used for transporting of Raw
materials inside the factory and Dispatch of Cement & Clinker:


I
II.

The ruling is that,
u
nder the provisions Sec.13 of APVAT
A
ct input tax credit will be
allowed to a VAT dealer on the purchases of taxable goods, if

such purchases are for use in
the business of the VAT dealer. The grant of input tax credit however is subject to the
restrictions and conditions specified under Section 13 and under Rule 20 of the APVAT Act
and Rules respectively. Under clause (i) of R
ule 20(2) any inputs used in the construction or
maintenance of any building including factory or office building are not eligible for input
tax credit. In the present case the dealer, M/s Madras Cements Ltd, claims that the
additional Railway siding cons
tructed in their factory premises is plant and machinery.
The question whether the Railway siding is part of the factory building or plant and
machinery is to be determined by the assessing authority after making a field visit to verify
whether the siding

along with the Railway line is annexed to the factory building totally or
only a part of it is annexed to the factory building with the remaining part forming a part of
the plant and machinery. The dealer would not be eligible to claim input tax credit t
o the
extent the siding is a part of the factory building.



***


15.
A.R.Com/85 /2007

Dated 30
-

07
-

2009





Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.M/s Keith Electronics Pvt.Ltd., Kavadiguda, Secunderabad,(TIN28600103253
.) have filed an application and sought clarification and
advance ruling on the
following items

Rate of tax on “OPTICAL FIBER FUSION SPLICER MACHINE”.

and ruling is given as under:


I
I
.

Optical Fiber Fusion Splicer Machine (HSN Code No. 8515.80.90 of Central Excise
tariff Code) is not specified in any of the Sch
edules and hence is liable to tax @12.5%
under the residuary entry of Schedule V.


Therefore, it is clarified that “Optical Fiber Fusion Splicer Machine” falls
under the residuary entry of Schedule

V
of the APVAT Act,

2005

and liable to tax
@12.5%.




***


16.
A.R.Com/ 78 /2007.

Dated 29
-

07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O
R D E R:


I
.M/s Zuari Cement Ltd. Krishnanagar, Yerraguntla, (TIN 28030153712 .) have filed
an application and sought clarification and advance ruling on the following items

a.
Whether the assessing authority can keep the files without responding to the

request of the applicant to transfer the registration files to the assessing
authority over its office in Hyderabad office.

b.
Whether pre
-
deposit of disputed tax in the case of taxing in deferment
period is to be deposited or to be deferred as in the cas
e of tax payment.


II.
Both the issues have been examined with reference to the provisions of the APVAT
Act and Rules and the ruling is given as under:


II
I.

As per sub
-
Rule (1) of Rule 13 of the APVAT Rules, dealer registered under
Section 17 shall notif
y the authority prescribed on Form VAT 112 or on Form VAT 051
as the case may be, regarding the intention of change of his place of business from the
jurisdiction of one authority to the jurisdiction of authority in the State. As per Section
17 read with
Rule 59, the authority, prescribed for VAT registration, is the CTO of the
circle concerned and for TOT registration, the ACTO of the circle authorized by the CTO
of the circle.



As per sub
-
Rule (3) (b) of Rule 3 , the authority, prescribed to receive a
n
application on Form VAT 112 or on Form TOT 051, as the case may be, for a change of
place of business shall, on approval of the application, remove such registration and shall
be transferred to the authority, prescribed, in whose jurisdiction the propose
d new place
of business is sought to be established. Hence the application for transfer shall be made
to the Registering authority prescribed.



According to the second proviso to the sub
-
section (1) of Section 31 of the
APVAT Act, an appeal so preferred

shall not be admitted by the appellate authority
concerned, unless the dealer produces proof of payment of tax admitted to be due or of
such installments as have been granted, and the proof of payment of twelve and half
percent of the difference of the t
ax assessed by the authority prescribed, and the admitted
tax by the appellant in the relevant tax period, in respect of which the appeal is
preferred.



Further, according to first proviso to sub section (2) of Section 33, no appeal
passed under Section

31 shall be admitted unless it is accompanied by satisfactory proof
of the payment of fifty percent of the tax ordered by the Appellate Authority under
Section 31.


Further, according to second proviso to sub section (2) of Section 33, no appeal
against t
he orders passed under sub
-
section (2) of Section 32 shall be admitted under sub
-

section (1) or (2) unless it is accompanied by satisfactory proof of payment of the tax,
admitted b y the appellant to be due or such installments thereof, and twenty five p
ercent
of the difference of the tax, ordered by the revisional authority under sub
-
section (2) of
Section 32, and the tax, admitted by the appellant.



Hence, in all the above cases, the appeals shall

not

be admitted unless the
applications are accompanie
d by the satisfactory proof of payment of 12.5% or 25%
or 50%
,

as the case may be
,

and the admitted tax. The payment of 12.5% or 25% or
50% taxes and the admitted taxes is a precondition for admission of appeals and
such taxes cannot be shown against defe
rment amount

treating them

as having
been paid for admission of appeals.



Therefore, it is clarified that, the amount calculated @ 12.5% or 25% or
50% as the case may be, of the disputed tax shall be actually paid for the purpose of
admission of appea
l and the notional or deemed payment, adjusted against the
eligible amount of industrial incentive, is not permissible as per the relevant
provisions of the APVAT Act, 2005.



***



17.
A.R.Com/ 34/2008.


Dated 29


07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I
.

M/s S P P POLY PACK (P) LTD, Kattedan,,(T
IN ) have filed an application and
sought clarification and advance ruling on the following

Rate of tax on the following Products:


Product

HSN Code

1)

Plain or printed Pol
ythene Bags 39239090

2) Plain or printed Polythene Sheets 39219039

3) Plain or printed Polythene Tubes 39173000

4) Waste and Scrap o
f Plastic 39159029


II
.

The issue has been examined with reference to the provisions of the APVAT Act
and Rules and HSN Codes notified by Government and the ruling is given as under:

Sl.No..



Product

HSN Code

Ruling

1)

Plain or printed Polythene Bags 3923.90.90 Falls u/item165of entry


100 of IVSch. and hence



liable to tax @ 4%.

2) Plain or printed Polythene Sheets 3921.90.39 This item is not specified



in any of the Schedules,


and hence liable to tax



@12.5%

3) Plain or printed Polythene Tubes 3917.30.00 This item is not specified


in any of the Schedules,



and hence liable to tax


@12.5%.

4) Waste and Scr
ap of Plastic 3915.90.29 Falls u/item 205 of entry


100 of IV Sch. and hence



liable to tax @ 4%.

Therefore, it is clarified that the goods
,

manufactured by the applicant
,

i.e.

Plain or
P
rinted Polythene Bags,
” and


Waste and Scrap of Plastic


falls under
items 165 and 205

respectively

of entry 100 of the Schedule

IV

and

are


liable to tax
@ 4%, and

Plain or
P
rinted Polythene Sheets,
” and


Plain or
P
rinted Polythene
Tubes


are not notified in any

of the

Schedules of the

APVAT

Act,

and

hence fall
under residuary entry of V Schedule
, taxable
@ 12.5%.




***

18.
A.R.Com/88/2008.

Dated 29
-

07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M
/s Pan Electro Technic Enterprises (P) Ltd., Chintal, HMT Road,
Hyderabad,
(
TIN28030185722.) have filed an application and sought clarification and
advance ruling on the following items

Rate of Tax on “ Electrical Transformers (Dry
Type)

and ruling is given

as under:



I
I The applicant stated that they are manufacturers of Oil Cooled Tranformers and


Electrical Transformers (Dry Type) and sought for clarification for rate of tax on

“ELECTRICAL TRANSFORMERS (Dry Type).


The issue is examined with reference to the provisions of the APVAT Act and

Rules and the ruling is given as under:


Since HSN Code is notified under entry 39 of the IV Schedule, Electrical



Transformers with

HSN Code 8504 are liable to VAT @ 4% up to 26.8.2005.


Consequent to the issue of orders by the Government in G.O.Ms.No. 1596
Rev.(CT
-
II) Dept. dt. 27.8.2005 wherein the Chapter 8504 was deleted from the list of
I.T. products, Electrical Transformers are

liable to VAT @ 12.5% w.e.f. 27.8.2005.


By G.O.M.s No. 1264 Revenue (CT
-
II) Dept. dt. 1.11.2008, Electrical
Transformers (Dry Type) with HSN Code 8504.31.00 are added under entry 121 of the
IV Schedule. Hence the same are liable to tax @ 4% on and from

1.11.2008.



Therefore, it is clarified that the ELECTRICAL TRANSFORMERS ( DRY
TYPE) are taxable @ 4% from 1.4.2005 to 26.8.2005, and @12.5% from 27.8.2005
to 31.10.2008 and @ 4%.from 1.11.2008.


*****


19.
A.
R.Com/ 76/2008.

Dated 29
-

07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s Ratan Stationery Mar
t, behind Osman Gunj, Hyderabad.
(TIN 28800176061) have filed an application and sought clarification and advance ruling
on the following items under Section 67 of APVAT Act, 2005 read wi
th Rule 66(2)(i) of
APVAT Rules, 2005 along with the application fee of Rs.1,000/
-

II. They sought clarification of Rate of tax on the following goods:

a.
Staplers ( HSN Code No. 8472.90.10)

b.
Staple Pins ( HSN Code No. 8305.20.00)

c.
Paper Punch
(HSN Code No. HSN Code No. 8472.90.90)

d.
Alpins (HSN Code No. 7319.30.00)

e.
Index Fick Clips ( HSN Code No. 8305.10.00)

and ruling is given as under:

II
I.

The applicant is dealer in stationery and requested to clarify the rate of tax on the
goods mentione
d supra.


Entry 47 of the IV Schedule deals with Diary, Calendar, Annual Reports,
Application Forms and similar printed material. The enlarged entry No, 47 of the IV
Schedule under G.O.Ms.No. 175 (CT
-
II) Dept. dt. 18.2.2009 deals with stationery items
l
ike Letterheads, Visiting Cards, Bill Books, Computer Stationery, Posters, Brochures,
CD/DVD Covers, Visual Aids, Danglers, Streamers, Envelopes, Labels, Telephone
Recharge Coupons, Report Card Tickets and so on.


The items, on which clarification is so
ught, are not mentioned in the said entry.
The goods, enumerated in the entry 47, are only paper based stationery items. Applying
the principle of “Ejusdem Generies”, all the above items fall outside the purview of the
entry 47 of Schedule IV and hence
are taxable @ 12.5% under residuary entry of
Schedule V of the APVAT Act, 2005.


Therefore, it is clarified that the goods dealt by the applicant namely Staplers
( HSN Code No. 8472.90.10),

Staple Pins ( HSN Code No. 8305.20.00),

Paper Punch
(HSN Code No.

8472.90.90),

Alpins (HSN Code No. 7319.30.00),

Index Fick Clips (
HSN Code No. 8305.10.00) falls under residuary entry of Schedule V of the APVAT
Act, 2005 and liable to tax @12.5%.



***


20.
A.R.Com/ 56/2
008.

Dated 29
-

07
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I
.

M/s

Acalmar Oils & Fats L
imited, Banjara Hills, Hyderabad, (TIN
28190157037.) have filed an application and sought clarification and advance ruling
on the following items

Rate of tax on “Palm Stearin ( both crude & refined)” under VAT Act.

II.

The applicant submitted the followin
g documents:


Write up on the issue copy of excise Law and copy of Departmental
Clarification of

Govt. of Goa
and ruling is given as under:


II
I.

The applicant states that they are in business of refining of edible vegetable oils and
manufact
ure of Vanaspati.

The crude vegetable oils are subject to the processing of
refining where by the colour, odour and free fatty acid contents are eliminated. In the
case of Refined Palm oil it is further subjected to fractionation whereby Refined
Palmolein
and Pals Stearin ( both crude and refined) products are generated.


Palm Stearin is generated by mode of physical processing and does not undergo
any chemical change/modification. Therefore it is purely a vegetable oil product of Palm
Oil. All these Pal
m products such as Refined Palm oil, Refined Palmolein, Refined Palm
Stearin etc. are classified under HSN Code under Chapter 1511. As per Schedule IV of
the APVAT Act, Palmolein & Plm oil are falling under entry 67 viz ‘ vegetable oils,’ and
hence sought

for rate of tax on “ PALM STEARIN (BOTH CRUDE & REFINED)”.


The issue is examined and the ruling is given as under:


The applicant relies on a clarification issued by the Central Excise Department in
support of their claim that palm stearin is classifiabl
e under HSN Code 1511. A perusal
of the clarification reveals that it had come to the notice of the Board that palm stearine
which is a fraction of palm oil is being classified under heading 1511 of the customs
Tariff at some ports and under 3823 at other
s. After examining the issue the Board stated
that the stearines falling under heading 1511 are basically tryglycerides ( esters) of fatty
acids and the stearines falling under heading 3823 are basically free fatty acids. The
board advised its officials
to get the goods chemically examined to verify whether they re
glycerides ( esters) or fatty acids ( 1511 or a mixture of fatty acids (3823) and collect
tariff accordingly.
The applicant is therefore advised to get their product also
chemically tested. I
f on such testing, it is proved that the stearine sold by them is a
glyceride ( ester) of fatty acids ( 1511) it is liable to tax at 4% under entry 67 of IV
Schedule to the APVAT Act. On the other hand if the product is proved to be a
mixture of fatty aci
ds (3823) it is liable to tax at 12.5% under5 V Schedule to
APVAT Act.




***







21.
A.R.Com/ 11/2008.

Dated 29
-

07
-

2009





Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s Minar Masts, Hyderabad, (TIN 28940135187.) have filed an application and
sought clarification and advance ruling on the following

Rate of tax on “Trans
portable Containers for Missiles and its Spare Parts and
Accessories”.(

ASTRA MISSILE)

ruling is given as under:

I
I.

The applicant states that the
container is designed for shipment and storage of
one ASTRA Missile,

and

comprises of specially designed a
luminium alloy extrusions,
castings and sheet and features a removable cradle ( Vibration structure assembly) and
seeks clarification on the rate of tax for the
Transportable Container for Missile and
its spares and accessories.


The issue is examined wi
th reference to the provisions of the APVAT Act and
Rules
as well as
and the brief technical description
,

submitted by the applicant
,

and the
ruling is given as under:


According to Section 6 of the APVAT Act, where the goods sold or purchased are
contain
ed in containers or are packed in any packing material liable to tax under this Act,
the rate of tax, applicable to such containers or packing material, shall be the same as the
rate of tax, applicable to such goods so contained or packed.


The ASTRA MISS
ILE, i.e. the content is liable to tax @12.5%, under Schedule
V. Hence the container for shipment and storage of the ASTRA MISSILE is also liable
to tax @12.5%.


Therefore it is clarified that the “ Transportable Containers for Missiles and
its Spare part
s and Accessories”
(
ASTRA MISSILE

)

fall
s

under residuary entry
under Schedule V of the APVAT Act, 2005 and liable to tax @ 12.5%.


***






22.
A.R.Com/ 59/ 2007.


Dated 28
-
07
-
2009
.



Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s. Bambino Agro Industries Ltd., Hyderabad have filed an application and
sought clarification and advance ruling on the following items



Whether the product “Macaroni” is similar to the product “Vermicelli” and if so,
taxable @ 4% or not?

II.

The applicant submitted the following documents:

1)

A copy of the order of the High Court dt. 12
-
8
-
1987 in W.P.No.10832 of
1987.

2)

A write up on the
product besides sampl
es of the product
and the ruling is
given as under:


II
I

The statement of arguments placed before this authority at the time of personal
hearing is carefully examined and held as hereunder:


Prior to introduction of APVAT Act, entry 6
0 of the 1st schedule to APGST Act,
1957, dealt with Maida, Atta, Ravva and Wheat Bran. There was a dispute between the
Department and the Trade about classification of Vermicelli. The view of the
Department was Vermicelli would fall under entry 129 A of

the APGST Act as against
the view of the applicant as Maida, under entry 60 of the 1st schedule. This dispute was
ultimately resolved by the Honourable High Court of A.P., in Jaya Foods case holding
that Vermicelli is nothing but Maida, under entry 60 of

the 1
st

Schedule in the absence of
specific entry for Vermicelli.


Subsequent to the J
udgement of the Hon’ble High Court, Vermicelli by name
was specifically inserted as entry 129 B of the 1
st

schedule to APGST Act by G.O.
Ms.No.114, dt.14.
-
4.1990.


With

effect from 1
-
4
-
2005, VAT Act has come into existence replacing the
APGST Act,1957. Entry 28 of the IV Schedule of the VAT Act deals with, Flour, Atta,
Maida, Suji, Besan and Ravva. The HSN Codes appended to this entry also do not
specifically notified
Vermicelli by name to say that Vermicelli falls under entry 28 of the
Schedule IV, appended to APVAT Act. Therefore it was clarified that Vermicelli falls
under residuary entry under V schedule to APVAT Act, 2005. Subsequently an
amendment was made to en
try 28 by G.O.Ms.No.1564, Revenue CT
-
II Department,
dt.17
-
8
-
2005, specifically including Vermicelli and Semiya, under entry 28 of Schedule

IV to APVAT Act, w.e.f 1
-
8
-
2005. Thus “Vermicelli” is liable to tax @ 4% prospectively
from the date of amendment.


The contention of the applicant is verified & examined with the Webster’s
Dictionary wherein the word “ macaroni” means “pasta prepared from wheat flour in the
form of dried hollow tubes” and the word “ vermicelli” means ‘ a kind of pasta in the
form of l
ong, slender, solid threads, resembling spaghetti”. The composition of these
products described shows
-

macaroni as “Hard wheat semolina” and vermicelli as “Hard
wheat semolina” and as such both products are made from “Hard wheat semolina”.
Hence, macaroni

is similar to vermicelli exact marketable trade name.


The issue was referred to the C.T.O. Basheerbagh Circle, Abids Division for the
remarks and the clarification sought by the applicant. In compliance, the C.T.O.
Basheerbagh Circle furnished his remark
s which read as under.


The applicant manufactures both products ‘Macaroni and Vermicelli” and have
mixture of wheat flour and other liquids. There is no difference between the “Macaroni
and Vermicelli” in the process under chemical nature etc. in the phy
sical nature which is
due to obtaining of different dies used for getting shapes such as springs, shells discs etc.
thus the ingredients used in the manufacturing of all the products “ Macaroni and also the
procedure is one and the same as to “Vermicelli”
, different being in the physical shape of
the product., “Vermicelli” is in the shape of long cuts and short cuts, whereas
“Macaroni” is in the shape of springs, shells and discs. etc.

No doubt, the CTO, Basheerbagh circle, is correct in his analysis. But

the
purposes, for which Vermicelli and Macaroni are used, are different. They are not
replaceable. The recipes, in which vermicelli is used, are different from the recipes, in
which macaroni is used. Normally macaroni is used in association with some vege
tables
or pieces of meat, whereas vermicelli is used exclusively. The cooking time, taken by
both of are different. In essence, one cannot be substituted for the other. Just because they
are made up of the same, one cannot come to the conclusion that they
are one and the
same. For example, both the utensils and the iron chairs are made up of iron and steel in
different shapes, but they cannot be treated as one and the same. Therefore in the absence
of specific mention of a product in any of the Schedules, s
uch product shall be treated as
falling in the residuary Schedule V and accordingly considered as liable to be taxed
@12.5%.

Therefore, it is

hereby clarified that the product ‘
mac
a
roni’ made
out
of
hard wheat is
not identical

to

vermicelli


and accordin
gly fall under Schedule

V,
appended to the APVAT Act, 2005 and

liable to tax @
12.5
%.




23.
A.R.Com/ 74/2008.

Dated 28
-
07
-

2009




Ref:
-

CCT’s.R
ef.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I
.M/s Zen Technologies Limited, Sanathnagar, Hyderabad, (TIN 28470200516.)
have filed an application and sought clarification and advance ruling on the following
items

Rate of tax on “Simulato
rs”

and ruling is given as under:


I
I.

The applicant stated that they

are engaged in designing, developing, and
manufacturing various types of training simulators for weapons and driving skills. The
simulators consist of hardware, software and mechanical i
tems. The hardware consists of
computers, projects and other peripherals, whereas the software consists of window
operating system that facilitates the operation of the simulator. The mechanical items
consists of driver cabin, adjustable motion platfor
m etc.


They further stated that the computer is the heart of the training simulators and all
other components like the sensing unit, display unit, printer, UPS, speakers etc., are
peripherals. The computer with Window Operating System installed thereon
that will run
the training software. Sub
-
item (14) of the entry 39 of Schedule IV of the APVAT Act,
relates to IT Software on any media. “Computers & computer peripherals” are covered by
sub
-
item (3) of Item 39. The value of mechanical items is infidecim
al. Therefore, it is to
be considered as an electronic good. The appellant is this connection relies on the
decision of the Supreme Court in State of Andhra Pradesh Vs. Kone Elevators (India)
Limited (2005) 140 STC 22. The Supreme Court, considering a pr
oportion of the material
component in a lift, held it as sale of goods and not a works contract. Following the same
principle, the appellant submits that since the predominant component of a simulator
consists of electronic items it should be considered a
s an electronic product. Accordingly
they sought clarification regarding the rate of tax to be adopted on the end product
“Simulator”.

A simulator is a composite product of several components, involving in a
systemic way several components, as enumerated i
n the contentions, raised by the
applicant. The contention that the Simulator should be taxed at the rate, applicable to the
constituent parts, predominantly present in their product called Simulator, cannot be
accepted. The end product, namely Simulator,
is different from its constituent parts, just
as a readymade garment is different from cloth.


Therefore, it is clarified that Simulators, which are not specified in
any of the Schedules, falls under the residuary entry of the Schedule V of the
APVAT Act a
nd are liable to be taxed @ 12.5%.



***




24
.
A.R.Com/ 5 /2009.

Dated 23
-
10
-

2009



Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.
Com/2005, Dated 13
-
04
-
2005.


O R D E R:



I.

M/s Kovi Plastics Pvt.Ltd., Ranigunj, Secunderabad,(TIN28720110718 ) have
filed an application and sought clarification and advance ruling on the following
items


a.

Rate of Tax on “ALUMINIUM SHEET PERFORATED

(
ALUMINIUM GRILLS) “with HSN Code 7606.12.00

b.

Rate of Tax on “ALUMINIUM SCRAP CASTINGS” HSN Code
7601.20.20

c.

Rate of Tax on “ALUMINIUM EXTRUSION PROFILE” with HSN
Code 7604.29.90.


and ruling is given as under:



The clarification i
s sought on the rates of tax, applicable to (i) ALUMINIUM
SHEET PERFORATED (ALUMINIUM GRILLS), (ii)

ALUMINIUM SCRAP
CASTINGS and (iii) ALUMINIUM EXTRUSION PROFILE. The issue has to be
examined only with reference to Entry 27 of the Schedule IV of the APVA
T Act. The
description of the said Entry is “
Ferrous and Non Ferrous Metals and Alloys and
extrusions thereof
”. According to the said Entry, Non Ferrous Metals and their
Extrusions are alone liable to tax @ 4%.
Extrusion is the process by which long str
aight
metal parts
like Wires, Sheets, Ingots etc., c
an be produced. The cross
-
sections that can
be produced vary from solid round, rectangular to L shapes, T shapes
,

Tubes and many
other different types. Extrusion is done by squeezing metal in a closed cav
ity through a
tool, known as a die using either a mechanical or hydraulic press.

Hence, only those
goods, which are the direct outputs of the process of extrusion, fall under Entry 27 of the
Schedule IV of the APVAT Act. If any thing is done to such outp
uts, subsequent to the
process of extrusion, such final products will not fall under the said Entry. Going by the
said ratio, only ALUMINIUM EXTRUSION PROFILES do fall within the ambit of the
said Entry and the others, namely, ALUMINIUM SHEET PERFORATED
(
ALUMINIUM GRILLS) and

ALUMINIUM SCRAP CASTINGS fall outside the ambit
of the Entry 27 of the Schedule IV of the APVAT Act.

Therefore, it is clarified that the ALUMINIUM SHEET PERFORATED
(ALUMINIUM GRILLS) and ALUMINIUM SCRAP CASTINGS are not
enumerated
in any of the Schedules appended to the APVAT Act and hence fall
under residuary Entry of Schedule V of the APVAT Act, liable to tax @ 12.5%.
Whereas, the


ALUMINIUM EXTRUSION PROFILES fall within the ambit of the
Entry 27 of the Schedule IV of the APVAT
Act and liable to tax @ 4%.



***









25.
A.R.Com/ 19 /2009.

Dated 23
-
10
-

2009




Ref:
-

CCT’s.Ref.No: PMT
/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I. M/s Nahnce Engineering Solutions Private Limited, Hytech City, Madhapur,
Hyderabad, (TIN 28600150686) have filed an application and sought clarification and
advance ruling on the following items under

a. Rate of Tax on “sale of Soft ware with in Andhra Pradesh”.

b.

Rate of tax on “sale of Software outside Andhra Pradesh, with “C” Form
and Without “C” Form”and ruling is given as under:


II.

The applicant stated that, they are doing business in the software
development and
marketing of ready made software to the various dealers within the State and outside the
State. They are also engaged in exporting the software to various countries and
importing software from other countries.
They sought for clarificatio
n
on the

rate of
tax on “sale of Soft ware within Andhra Pradesh” and on “sale of Software outside
Andhra Pradesh with “C” Form and
w
ithout “C” Form”.




The readymade
Software, sold to the dealers/customers within the State, fall
under Entry 2(v) of the S
chedule IV appended to the APVAT Act and hence is liable for
tax @ 4%.


Therefore, it is clarified that the readymade Software, sold to the
dealers/customers within the State is liable to tax @ 4%.


Since the authority, constituted by the Commissioner o
f Commercial Taxes under
Section 67 of the APVAT Act, is empowered to clarify any aspect of the implementation
of APVAT Act and has no jurisdiction to clarify on any of the provisions under Central
Sales Tax Act.


Therefore, this Authority is not inclined

to give ruling on the issues raised
under Central Sales Tax Act.



***





26.
A.R.Com/24 /2009.

Dated 23
-
10
-

2009





Ref:
-

CCT’s.
Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.



O R D E R:



I.

M/s Bharat Heavy Plate & Vessels Limited, Visakhapatnam, (TIN
28280189432) have filed an application and sought clarification and advance
ruling on the following items


a. Compact Heat Ex
changers designed, developed, manufactured and delivered to
“AERONAUTICAL DEVELOPMENT AGENCY” against projects sanctioned
and funded by AERONAUTICAL DEVELOPMENT AGENCY will amount to
sale or not ?

b.If it amount to sale what will be the rate of sales tax
applicable to such supply
and whether can be accepted any concessional Form or not?


and the ruling is given as under:


II.

The applicants are Public Sector Undertaking, working under the Department of
Heavy Industries & Public Enterprises and e
ngaged in the activity of manufacture,
supply and erection of capital equipments. They stated that they have received an
order from Aeronautical Development Agency (Ministry of Defence, Govt. of
India, Bangalore) for supply of 10 Nos. of Pre
-
coolers and 8
Nos. of FADEC
Coolers i.e. COMPACT HEAT EXCHANGERS for TEJA Air
-
Craft . The work
order is placed and funds were also sanctioned by “AERONAUTICAL
DEVELOPMENT AGENCY”. They sought clarification on the issue whether
Compact Heat Exchangers designed, developed
, manufactured and delivered to
“AERONAUTICAL DEVELOPMENT AGENCY” against projects sanctioned
and funded by AERONAUTICAL DEVELOPMENT AGENCY will amount to
sale or not. They further sought clarification with regard to the rate of tax,
applicable to such sup
ply, if it amounts to sale and on the question whether any
Form, enabling the levy of tax at a concessional rate of tax, can be accepted or
not?


The arrangement between the “AERONAUTICAL DEVELOPMENT
AGENCY” and M/s Bharat Heavy Plate & Vessels Limited, Vi
sakhapatnam, as
explained by the Authorised Representative of the Appellant at the time of
hearing and can be ascertained from the various documents, filed by the Applicant
is as follows:


The “AERONAUTICAL DEVELOPMENT AGENCY”, hereinafter
called ADA, plac
ed a Purchase Order for manufacturing and supply of Precooler
and FADEC Cooler for LPS and Navy Aircrafts and others and sanctioned
different amounts of expenditure towards different heads like Raw Materials,
fabrication, Acceptance Testing etc. to the App
licant. These amounts are
scheduled to be released, as agreed upon by both the Parties. There is provision
for advance payment towards procurement of raw materials. The sanction of
expenditure towards raw materials is provisional and can be revised on the
basis
of increase in the prices of the said raw material. The contention of the applicant
is that the contract between them and ADA is not for sale but for development of
the end product, for which the consideration is paid. It is explained that the raw
ma
terials are purchased by the Applicant and the expenditure thereof would be
reimbursed by ADA. The contract is clearly for designing, developing,
manufacturing and delivering the products, for which the consideration is paid by
ADA to the Applicant. Thus t
here is an implicit contract for sale, since the
consideration, determined and paid in any manner whatsoever, is for the delivery
of ultimate product, manufactured by the Applicant. It is clear that the property in
goods will be transferred against a price
, decided on various parameters like cost
of raw materials, cost of fabrication etc., and paid in a manner, mutually agreed
upon. The manner of determination of price or the manner of payment will not
alter the nature of transaction and if does, such a col
ourable device can be used by
anybody to avoid payment of tax. The only question that determines the tax
liability under the local VAT Act is whether there is a sale or not. The transaction
in question has all the ingredients of sale
such as existence of s
eller and buyer,
contract of sale and consideration

and hence is liable to tax under the APVAT
Act. Further the products, designed, developed, manufactured and delivered
against projects, sanctioned and funded by ADA in the circumstances and facts,
explain
ed above, are taxable under the APVAT Act. The said products, namely,
Pre
-
coolers and FADEC Coolers,

used in the Aircrafts, are liable to tax @4%, as
they are enumerated at
Sl. No. 47 of Entry 102 of the Schedule IV, appended to
the APVAT Act
. Further ther
e is no prescribed Form, against which concessional
rate of tax can be extended.



Therefore, it is clarified that the products, designed, developed,
manufactured and delivered against projects, sanctioned and funded by
ADA are taxable under the APVAT Act
and the Pre
-
coolers and FADEC
Coolers, used in the Aircrafts, are liable to tax @ 4%.
Further, it is clarified
that there are no statutory provisions, prescribing a Form, against which
concessional rate of tax can be extended

to the transactions in questio
n.

***



27.
A.R.Com/ 33 /2009.

Dated 23
-
10
-

2009




Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.


O R D E R:


I.

M/s CDR Healthcare Limited,. Hyderguda, Hyd
erabad, (TIN 28394049026) have
filed an application and sought clarification and advance ruling on the following
items:
-


Applicable rate of tax on ”AIR CLEAN /AIR VENT5ILATION SYSTEMS/
AIR HANDLING SYSTEMS AND SPARES” which are used in a hospital
and ru
ling is given as under:

II.

In view of the amendment made to Schedule IV of the APVAT Act, vide G.O.
Ms. No. 499 Revenue (CT
-
II) Department, the applicant
sought for clarification on

applicable rate of tax
for “AIR CLEAN /AIR VENT
ILATION SYSTEMS/ AIR
HANDL
ING SYSTEMS AND SPARES”
,

which are used in Hospitals.
The

G.O. Ms.
No. 499 Revenue (CT
-
II) Department

dated 06
-
05
-
2009 incorporated “
Clean Air
Ventilation Systems/Air Handling systems and the parts thereof, used in Pharmaceutical
Industry
” in the Schedule
IV of the APVAT Act at Sl. No. 50 under Entry 102. The plain
reading of the said Entry shows that the said goods are taxable @ 4%, only when they are
used in the Pharmaceutical Industry, but not in Hospitals. The intention of the
Legislature is to extend
the benefit of lower rate of tax only for the said goods, used as
inputs in Pharmaceutical Industry.



Therefore, it is clarified that the

“AIR CLEAN /AIR VENT
ILATION
SYSTEMS/ AIR HANDLING SYSTEMS AND SPARES”
,
used in Hospitals
, are
liable to tax @ 12.5%
.




***



28.
A.R.Com/ 38 /2009.

Dated 23
-
10
-

2009





Ref:
-

CCT’s.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13
-
04
-
2005.



O R D E R:



I.

M/s Bake
Zone Bakers and Confectioneries, Ashoknagar, Hyderabad,
(TIN28346302661) have filed an application and sought clarification and advance
ruling on the following items


In view of amendment made by

Act No. 4 of 2009 , Whether “Bakery” items
sold by the applicant across the counter i.e. not served with the premises, tax
has to be paid under other provisions in the Act at the applicable rates and
that in respect of such sales corresponding Input Tax
Credit can be availed?


and Rules and Ruling is given as under:



II.

The applicant’s representative stated that the applicant is engaged in the
business of trading in baked food, cool drinks, packed chips, biscuits etc. and the annua
l
total turnover of the applicant is less than 1.5 crores in respect of sales of all such goods.
In view of latest amendment made by Act No. 4 of 2009, the applicant sought
clarification on the question whether the applicant would fall under the category o
f
clause (d) of sub
-
section (9) of Section 4 (newly introduced), or
under the other
provisions of the Act. He further sought clarification on the issue whether the “Bakery”
items, sold by the applicant across the counter i.e. not served within the premis
es, if
taxable at the rates applicable to them under the relevant Entries in the Schedules of the
APVAT Act,
are

eligible for
Input Tax Credit.


Only the specified goods, served in any Restaurant or Eating House or any other
similar establishment, are alon
e liable to tax under Section 4 (9) (d) of the APVAT Act.
Those goods, which are not served within the premises, but sold across the counter are
liable to tax at the rates applicable to them under the relevant Entries in the Schedules
appended to the APVA
T Act in case of a VAT dealer. When any establishment partly
sells goods and partly serves the goods within their premises, the goods, sold across the
counter, are liable to tax at the rates, applicable to them under the relevant Entries in the
Schedules
appended to the APVAT Act in case of a VAT dealer, while the goods, served
within the premises, are liable to tax under Sec.4(9)(d) of the APVAT Act.


Therefore, it is clarified as follows:


i.)
The goods, to the extent served within the premises of any
Hotel, Restaurant,

Eating House or similar Establishment, are liable to tax under Sec. 4 (9) (d) of

the APVAT Act.


ii)
The goods, to the extent sold across the counters of any Hotel, Restaurant,


Eating House or similar Establishme
nt and not meant for consumption within


the premises, are liable to tax at the rates, applicable to them under the relevant

Entries in the Schedules appended to the APVAT Act in case of a VAT dealer.

The goods, so sold, are eligible for
Input Tax Credit, subject to the restrictions

imposed under the APVAT Act and Rules.


***





***