PANAJI: The Goa Commercial Taxes Department has decided to widen its Value Added Tax (VAT) and Goa Entry Tax net to rope in government contractors by making a stipulation in contract tenders for mandatory registration of contractor as dealer under Goa Value Added Tax, 2005, and Goa Tax on Entry of Goods Act, 2000.
Goa Commissioner of Commercial Taxes Vallabh Kamat told The Hindu on Wednesday that this provision would especially be applicable to contractors sourcing goods\machinery for contracts from outside the State. If effectively implemented, it was expected to generate at least Rs. 10 crore to the State treasury annually. Based on the Commissioner's recommendation, the State Finance Department recently issued a circular stating that the notice inviting tenders issued by an employer – Public Works, Forest and Urban Development departments, zilla panchayats or agencies of the Government – must stipulate the condition of registration of contractor as dealer under Goa VAT Act , 2005, and Goa Entry Tax of Goods Act, 2000. The move is aimed at blocking the instances where contractors avoid assessment of tax or even evade tax payment in Goa.
Mr. Kamat said that Section 28 of the VAT Act stipulated the employer to deduct tax at 1 per cent of the bill amount as TDS and credit the same with the government account either by adjustment through government account or payment by challan to treasury. However, it had been noted that many contractors neither filed registration nor claimed refund nor adjustment of TDS and allowed such deduction to be forfeited to the Government.
Often a non-resident dealer or an unregistered dealer procuring goods\machinery from outside the State is found to avoid payment of local taxes, having no registration.