Effective From :  29/01/2008

Gist :  

Sub:- Fixation of Floor rates for Ceramic Tiles for Advance Tax – reg.

Rampant under-valuation in consignments of ceramic tiles of all types has been widely reported from the trade. Market investigation confirms that only about half of the value is conceded by the traders while issuing bills in respect of the tiles distributed through the unauthorized sector, especially from Morbi, Gujarat. This practice of underbilling during purchase results in undervaluation in the sales also and leads to loss of revenue to the State Government.

There is however a need to fix floor values on purchase of such goods to prevent arbitrary action by the officials of the Commercial Taxes Department.

In the circumstances, based on market survey and data collected from several leading companies the following floor rates are fixed as benchmark in respect of the purchase of wall, floor and vitrified tiles of the lowest quality.

The above purchase value is prescribed excluding freight incurred. While estimating the sale price for the purpose of collecting advance tax as per Circular No.50/2006, if the purchase value is declared below the floor rate, it should be reckoned by adopting the above floor rate by adding the freight charges and 5% gross profit. The details regarding the lowest freight charges from Gujarat to various destinations in Kerala are annexed for information.

In order to arrive at a uniform method in measurement, it is directed that all dealers shall mention the quantity in meter square (M2) in invoices. If the consignments are brought from outside the State using other units of measurements, the quantity should be declared at the check post / assessing authority in square meters (M2) along with declaration in Form No.8F.

While filing the stock statement as well as audit report, the quantity of tiles should be specified in square meters (M2 ).

All officers are directed to ensure that the volume of purchase and sale of tiles of all types are given in square meters (M2 ) and that the purchase value declared excluding freight is not below the floor rate fixed above.

They are also directed to ensure that the selling price shall be based on the valuation adopted for the purpose of advance tax, for which periodical visits shall be done to the premises by the assessing authorities as well as the Intelligence Officers and Audit Officers.

Commissioner

Commercial Taxes