The Goa Value Added Tax (Amendment) Bill, 2023 has been passed in the Goa Legislative Assembly on 18th January 2023 which contains certain ease of doing business measures for the taxpayers under the VAT regime. It also got the assent of the Hon. Governor of Goa and is notified vide notification no. 7/6/2023-LA dated 27th February 2023. A copy of the notification is enclosed.
Unlike other tax laws such as The Goods and Services Act and the Income Tax Act, wherein a GSTN or PAN obtained once will remain valid until the cancellation of the registration, the registration obtained under the Goa VAT Act, 2005 had to be renewed every three years. This registration has to be renewed by submitting an application for renewal of registration along with a copy of the payment of prescribed fees.
The year 2017 was the time when taxpayers were gearing up for the new Goods and Services Tax (GST). Since the GST was a monumental shift in indirect taxation, many taxpayers were still unclear on the scope of the law and inadvertently did not renew the VAT registration in the prescribed time. Similarly, the year 2020 was the year of the pandemic wherein taxpayers had to follow COVID norms and restrictions of movement. Further, COVID-19 had put the taxpayers into severe health and financial constraints, and thus could not renew their VAT registration on time.
The implication of not renewing the registration in the prescribed time resulted in the denial of benefits of the value-added taxation, including availing of Input tax credit to such taxpayers. The input tax credit was disallowed and demanded by the Department as tax payment, along with interest and penalties, causing undue hardships to genuine businesses who had inadvertently not renewed the registration in time.
The taxpayers primarily affected in these matters comprised of dealers in alcohol for human consumption, i.e. wine and liquor retailers, supermarkets, restaurants, hotels etc.
Considering the hardships faced by the taxpayers, and in order to have a fair tax mechanism for the genuine taxpayers and to strive for ease of doing business, the Goa Chamber of Commerce & Industry had represented:
1. That the taxpayers who have inadvertently not renewed their registration in time for the period starting from 01/04/2017, during which the taxpayers were gearing up for the transition to the Goods and Services Tax regime and the following period from 01/04/2020, during which the country was experiencing pandemic induced constraints and restrictions of movement, be treated as registered taxpayers and the benefits under the Act, including availing of Input Tax credit be allowed to them for this period.
2. That the periodic renewal of registration of VAT is scrapped, and that any taxpayer who has obtained registration under Goa VAT Act, 2005 be deemed to be registered unless the registration is cancelled.
The GCCI has been representing on this matter since March 2022, whereby a letter was addressed to the SGST Commissioner on 17th March 2022 and followed by letters to the Principal Chief Secretary, Government of Goa and Hon. Chief Minister of Goa. The requests were also part of Pre-Budget Submissions of the State Budget for the year 2022-23 submitted by GCCI vide letter dated 25th March 2022 to the Hon. CM of Goa. GCCI Taxation Committee led by Chairman, CA Rohan Bhandare, played a prominent role in addressing this matter.
The requests were followed by several meetings and discussions by GCCI with the SGST Commissioners, the Under-Secretary(Finance), the Principal Secretary (Finance), Chief Secretary and Hon. Chief Minister, with the latest meeting taken up on this matter on the 5th January 2023.
The Chamber is glad to inform you that the Goa Government has considered both the requests of GCCI favourably and introduced the necessary amendments in the Goa Value Added Tax (Amendment) Bill, 2023. The Bill has been passed in the Legislative Assembly. Got assent of the Hon. Governor and is notified vide notification no. 7/6/2023-LA dated 27th February 2023.
This is a great relief to the taxpayers under the VAT Regime, especially for the alcohol dealers. The scrapping of periodic renewal has also been a long-standing matter and will greatly help in the ease of doing business.
The Chamber thanks the Goa Government under the leadership of Dr Pramod Sawant, Hon. CM of Goa, the SGST Commissioner and his team and also Principal Secretary (Finance ) and his team from the finance Department.