COMMERCIAL TAXES AND

REGISTRATION DEPARTMENT

DEMAND NO.10
COMMERCIAL TAXES

POLICY NOTE
2017-2018

K.C.VEERAMANI
MINISTER FOR COMMERCIAL TAXES

©
GOVERNMENT OF TAMIL NADU
2017
 INDEX

Sl. No. Subject Page

No.
1. INTRODUCTION 1
2. TRENDS IN REVENUE 3
COLLECTION
3. ACT-WISE REVENUE OVER THE 4
PAST FIVE YEARS
4. ORGANISATIONAL SET UP 5
A Assessment Wing 5
B Audit Wing 7
i) Accountant General’s Audit 8
C Appellate Wing 9
i) First Appeal 9
ii) Tamil Nadu Sales Tax Appellate 10
Tribunal

iii) Tax Cases in High Court and 11

Supreme Court
D Enforcement Wing 12
i) Field Enforcement Divisions 12
ii) Inter-State Investigation Cell 13
(ISIC)
iii) State Business Intelligence Unit 14
 iv) Divisional Business Intelligence 15
Units (DBIUs)
E STATISTICS AND RESEARCH 16
CELL
F COMMERCIAL TAXES STAFF 17
TRAINING INSTITUTE (CTSTI)
5. ACTS ADMINISTERED BY THE 19
DEPARTMENT
6. ADMINISTRATIVE COST 20
7. GOODS AND SERVICES TAX (GST) 21
i) TAXATION POWERS OF CENTRE 21
AND STATES
ii) GOODS AND SERVICES TAX 22
iii) STAND OF TAMIL NADU ON GST 22
iv) ROLL OUT OF GOODS AND 28
SERVICES TAX
v) SALIENT FEATURES OF GST 29
vi) TAX RATES UNDER GST 34
vii) AWARENESS ON GOODS AND 37
SERVICES TAX
viii) HELP DESKS 39
8. TRADERS WELFARE 40
i) Traders Welfare Board 40
ii) Renewal of Membership Fee 41

iii) Welfare Schemes 41

9. COMPUTERISATION 42
i) Total Solution Project 42
ii) Online Registration 44
iii) Online generation of Checkpost 44
forms (JJ, KK, LL and MM)
iv) Filing of returns 45
v) e-payment 45
vi) Online issue of ‘C’ & ‘F’ forms 46
vii) Refund request for exporters 46
viii) e-filing of Annual Returns 47
ix) Other online Services 47
x) Intranet facilities to the 48
Department
xi) Dealers migration to GST Portal 49

xii) Data Retrieval Lab 50

10. INFRASTRUCTURE DEVELOPMENT 50
A Construction of own buildings for 50
Commercial Tax Assessment
Circles other than Chennai
B Construction of own buildings 52
for Commercial Tax
Assessment Circles in Chennai
 C Construction of Integrated 53
Commercial Tax Office building

D Construction of own buildings 54

for Commercial Tax assessment
circles
E Additional Fund for Building 55
Maintenance
G Purchase of Vehicles 55
11. RIGHT TO INFORMATION ACT, 56
2005
 POLICY NOTE
2017-2018
COMMERCIAL TAXES DEPARTMENT

INTRODUCTION

Commercial Taxes Department

contributes more than 78 percent of the

State’s own tax revenue. The Commercial

Taxes Department has collected a gross

revenue of Rs. 67,576.77 crore during the

year 2016-2017. This marks a growth rate of

10.13% over the previous year’s collection.

It is to be noted that the impressive

growth in tax collection has been achieved,

despite the downward trend in the price of

petroleum products in the

 2

early part of the year, demonetization of

Specified Bank Notes (SBN) in November,

2016 and natural calamities like the Vardah

cyclone in December 2016 and severe

drought thereafter. The target has been

achieved by streamlining the collection

mechanism and enhancing the efficiency of

the administrative machinery. Even though

the tax on petroleum products was slightly

raised in March 2017, it may be noted that the

tax rate on petrol and diesel in Tamil Nadu is

lesser than other Southern States.

 3

2. TRENDS IN REVENUE COLLECTION

Gross Revenue collection by the

department under all the Acts in the past five
years is as below:
Table: Tamil Nadu - Revenue
Collection 2012-13 to 2016-17

Year Revenue Collection

(Rs. in crore)
2012-2013 47,885
2013-2014 56,852
2014-2015 60,314.61
2015-2016 61,709.58
2016-2017 67,576.77

As is evident from the above Table, an

additional collection of Rs.5867.19 crores
was made over the previous year. This
marks a growth of 10.13%. The Chart-1
appended to the Policy Note depicts the
trend.
 4

3. ACT-WISE REVENUE OVER THE PAST

FIVE YEARS
Act-wise revenue contributions during the
last five years are as below:
Table: Tamil Nadu – Act Wise Revenue
Collection 2012-13 to 2016-17
(Rs. in crore)

2012- 2013- 2015- 2016-

Act 2014-2015
2013 2014 2016 2017

1 Tamil Nadu 42,038 51,245 53,930.47 54,804.55 59,262.00

Value Added
Tax
2 Central 2,904 3,116 3,811.17 4,037.76 5,125.20
Sales Tax
3 Tamil Nadu 261 218 195.21 211.11 188.65
General
Sales Tax
4 Entertainments 70 68 82.97 106.29 85.81
Tax
5 Betting Tax 6 5 5.60 5.65 7.86

6 Luxuries Tax 290 300 319.26 357.03 379.01

7 Entry Tax on 2,316 1,900 1,969.93 2,187.19 2,528.24

Vehicles

Total 47,885 56,852 60,314.61 61,709.58 67,576.77

The Chart-2 appended to the Policy Note

depicts the trend.
 5

4. ORGANISATIONAL SET UP

The department carries out its core

function of administering various Commercial
Tax enactments with the help of a well-
structured organizational set-up. Having
headquarters at Chennai, the Commissioner
of Commercial Taxes, Head of the
Department, is assisted by five Additional
Commissioners and one Joint Commissioner
(Administration). The department has been
organized on functional lines and its various
responsibilities are carried out by four
different wings of the department as
described below:-
A. Assessment Wing

There are 334 assessment circles

located across the State headed by Assistant
Commissioners / Commercial Tax Officers
which carry out the core functions of the
department such as registration, collection,
 6

return, tax, making assessment etc.. These

circles are monitored by 40 Territorial
Deputy Commissioners at District /Zonal
level and by 10 Joint Commissioners at the
Divisional level.

Besides the above assessment circles,

top 100 assessees of Chennai Divisions are
assessed by Large Taxpayers Unit(LTU),
Chennai, headed by a Joint Commissioner
with four Deputy Commissioners. About 55%
of total revenue collection is done in this
LTU. Another Divisional LTU is functioning in
Coimbatore Division headed by a Deputy
Commissioner to assess 66 top assessees of
this Division, who contribute about 40% of
collection of this Division.
 7

B. Audit Wing

Audit is an inherent part of any tax

administration and it is meant to check the
correct payment and assessment of taxes,
point out errors in assessments, verify the
records related to outflow of the Government
fund by way of refunds and point out any
irregularities or malpractices in tax
accounting, among other things.
Each Commercial Tax Division has one
internal audit party headed by an Assistant
Commissioner assisted by a Commercial Tax
Officer. These internal audit parties take up
regular audit of the assessment circles and
check posts based on the programme drawn
by the Joint Commissioners.
 8

i) Accountant General’s Audit

Annual audit in the assessment

circles, is a periodic exercise by the
Accountant General. Besides, the Accountant
General does thematic study and
performance audit on different activities of
the department from time to time. Important
audit observations pointed out by the
Accountant General are discussed in the joint
meetings of the Departmental Audit
Committee which are regularly conducted by
the Secretary to Government, Commercial
Taxes and Registration Department and
attended by the Commissioner of
Commercial Taxes and the senior officials
from the office of the Accountant General.
 9

C. Appellate Wing

i) First Appeal
The first appeal against the orders
passed by any assessing officer upto the
rank of Assistant Commissioner lies before
the Appellate Deputy Commissioner
concerned and the appeal against the
assessment orders passed by Deputy
Commissioner lies before the Appellate Joint
Commissioner having jurisdiction. Twenty
Appellate Deputy Commissioners and two
Appellate Joint Commissioners are
functioning in the appellate wing of the
department. In case of appeals filed before
the appellate authorities, the department is
represented in each appellate forum by a
Departmental Representative in the cadre of
Assistant Commissioner.
 10

ii) Tamil Nadu Sales Tax Appellate

Tribunal
Appeal against orders of the First
Appellate Authority i.e., Appellate Deputy
Commissioners or Appellate Joint
Commissioners lies before the Sales Tax
Appellate Tribunal (STAT). The Main Bench of
STAT is located in Chennai and Additional
Benches are located in Chennai, Madurai and
Coimbatore. The STAT is headed by the
Chairman, in the rank of a District Judge. An
officer belonging to Indian Audit and
Accounts Service or Income Tax department
or Central Excise department or Customs
department or Railway Accounts department
or Defence Accounts department or a
member of the Institute of Chartered
Accountants of India or the Institute of Cost
and Works Accountants of India is the
second member of the Tribunal. A
Departmental member in the cadre of an
Additional Commissioner is also appointed as
a member of the Main Bench.
 11

Each Additional Bench of the STAT is

constituted by a Judicial Member in the rank
of a Subordinate Judge and an Additional
Departmental Member in the cadre of a Joint
Commissioner. A State Representative in the
cadre of a Joint Commissioner and an
Additional State Representative in the cadre
of a Deputy Commissioner represent cases of
the department before the Main Bench and
the Additional Benches, respectively.

iii) Tax cases in High Court and Supreme

Court
Additional Government Pleader (Taxes),
assisted by Government Advocate appears
on behalf of the department in tax cases
relating to the department in the High Court
of Madras and Madurai Bench of Madras High
Court. They also defend the writ petitions
filed against the department. The Tamil Nadu
Government Advocate-on-Record assist the
department in conducting the cases in the
Supreme Court of India.
 12

D. Enforcement Wing

i) Field Enforcement Divisions

This wing consists of eight

Enforcement divisions spread across the
State and one Inter-State Investigation Cell
located in Chennai. All Enforcement divisions
and the Inter-State Investigation Cell are
headed by Joint Commissioners. Primary
function of Enforcement Wing is to identify
and control evasion of tax by making
investigation, monitoring the movement of
goods, conducting surprise inspections and
field audit in the places of business of
assessees.

Inter-state movement of goods is

monitored through 28 check posts situated
at the State borders between Tamil Nadu
and Andhra Pradesh, Karnataka, Kerala and
Puducherry. 13 checkpoints have also been
established at key locations like seaports,
 13

railway yards in the State. Besides,

movement of goods within the State is also
monitored by 61 Roving Squads. 144 Groups
consisting Commercial Tax Officers and
Deputy Commercial Tax Officers are used to
make investigation with regard to tax
evasion and to conduct field audit and
surprise inspection at the place of business
of dealers. The proposals evolved on the
basis of result of such audit and inspection
are sent to the assessing authorities
concerned to implement the same by making
assessment.

ii) Inter - State Investigation Cell (ISIC)

Inter-State Investigation Cell (ISIC) is
headed by a Joint Commissioner who liaises
with officials in other States to detect
evasion of tax in respect of inter-State
transactions and exchanges data with them
for verification. Based on the result of such
 14

verification, proposals are evolved wherever

possible and sent for implementation. In
certain cases, Investigation Files are opened
and sent to Joint Commissioner, enforcement
concerned to take further action.

iii) State Business Intelligence Unit

A Business Intelligence Unit has been
established in the office of the Commissioner
of Commercial Taxes under the direct
supervision and control of the Commissioner
of Commercial Taxes. This Unit is headed by
a Joint Commissioner consists of one Deputy
Commissioner, four Assistant
Commissioners, one Assistant Programmer
and one Statistical Inspector. The State
Business Intelligence Unit (SBIU) makes
extensive use of Information Technology in
analyzing the data received from various
sources like returns of the dealers,
documents collected at the check posts of
 15

the Department, information gathered from

the agencies of Central Government such as
Central Board of Excise and Customs (CBEC),
Central Board of Direct Taxes (CBDT),
Director General of Foreign Trade (DGFT)
etc., returns and check post data of various
other State Governments, etc. to detect
major tax evasion. Useful reports prepared
on the basis of such data analysis are sent to
Territorial and Enforcement Wings of the
department for taking further action towards
curbing tax evasion.

iv) Divisional Business Intelligence

Units (DBIUs)
Divisional Business Intelligence Units
(DBIUs) have also been constituted in each
Enforcement division under the direct control
of the Joint Commissioner. They undertake
similar investigation activities as done by
SBIU, collecting information from local
authorities/sources within their jurisdiction.
 16

E. STATISTICS AND RESEARCH CELL

Statistics and Research Cell at the

headquarters is headed by a Joint Director of
Statistics. The team comprises one Joint
Director (Statistics), two Statistical Officers,
one Statistical Inspector and two Assistant
Statistical Inspectors.
Each Commercial Taxes Division has a
Junior Research Officer assisting the Joint
Commissioner and each Zone/Commercial
Taxes District has a Statistical Inspector
assisting Deputy Commissioners.
Statistics and Research Cell regularly
brings out the following reports /
publications:-
1. Booklet on “Commercial Taxes
Department – Administrative
Report” – Annually
2. Selected Indicators on Commercial
Taxes Department (Folder) –
Annually
 17

3. Time series report on “Statistical

Compendium on Commercial Taxes
Department” – Annually
4. Revenue Analysis of Top 100
dealers for all Divisions and for the
State – Monthly
5. Revenue Analysis of maximum
revenue yielding commodities for
all the Commercial Taxes Divisions
and for the State – Monthly
6. Report on Act-wise and Division-
wise revenue - Monthly and
7. Report on Monthly Performance of
the Divisions – Monthly.

F. COMMERCIAL TAXES STAFF

TRAINING INSTITUTE (CTSTI)

The Commercial Taxes Staff Training

Institute in Chennai, functioning from the
year 1982 onwards, is headed by a Director
in the cadre of Joint Commissioner
(Commercial Taxes). “In Service Training”
and “Refresher Course Training” to all
 18

officials of the department is imparted by

this Institute. Training is also imparted at the
Regional Training Centres located at Vellore,
Salem, Coimbatore, Trichy, Madurai and
Tirunelveli. All the staff and officers of the
department are taught basic computing skills
as well.
From the year 2015-2016 besides
regular training, the following special
trainings were organised:-

 Management training at Indian

Institute of Management for the
officers in the cadre of Joint
Commissioners and Deputy
Commissioners;
 One day soft skill training at Anna
Institute of Management for the
officers in the cadre of Commercial
Tax Officers and Deputy Commercial
Tax Officers; and
 19

 Three days soft skill training at

Anna Institute of Management for
the direct recruitment Assistant
Commissioners as a part of In-
service training programme.
5. ACTS ADMINISTERED BY THE
DEPARTMENT
Commercial Taxes Department
administered the following Tax enactments till
30.06.2017:-

1. Tamil Nadu Value Added Tax Act,

2006 (from 1.1.2007 to 30.6.2017)

2. Central Sales Tax Act, 1956

3. Tamil Nadu General Sales Tax Act,
1959 (upto 31.12.2006)

4. Tamil Nadu Additional Sales Tax

Act, 1970 (upto 31.12.2006)

5. Tamil Nadu Entertainments Tax Act,

1939
6. Tamil Nadu Betting Tax Act, 1935
7. Tamil Nadu Tax on Luxuries Act,
1981
 20

8. Tamil Nadu Tax on Entry of Motor

Vehicles into Local Areas Act, 1990

9. Tamil Nadu Tax on Entry of Goods

into Local Areas Act, 2001

10. Tamil Nadu Advertisements Tax

Act, 1983.

In lieu of the above Acts, the Tamil

Nadu Goods and Services Tax Act, 2017
has been enacted with effect from
1.7.2017.

6. ADMINISTRATIVE COST

Cost efficiency of Tax administration by

Commercial Taxes Department has been
improved over the years. Administrative cost
of Commercial Tax collection has never
crossed even 1% of the total tax receipts in a
year.
 21

7. GOODS AND SERVICES TAX (GST)

(i) TAXATION POWERS OF CENTRE AND

STATES
The Constitution of India provides for
delineation of power to levy indirect tax
between the Centre and the States.
Accordingly, the Central Government used to
tax on manufacture of certain goods in the
form of Central Excise Duty, provision of
certain services in the form of Service Tax,
inter-State sale of goods in the form of
Central Sales Tax. Similarly, the State
Governments used to levy tax on, sales in
the form of Value Added Tax, Luxuries Tax,
Entertainments Tax, entry of goods and
vehicles into the State in the form of Entry
Tax, Betting Tax, Advertisement Tax, etc.
 22

(ii) GOODS AND SERVICES TAX

As a transformative step in the field of
indirect tax reforms in India, the
Government of India decided to amalgamate
a large number of Central and State taxes
into a single tax called the Goods and
Services Tax (GST). To facilitate levy of GST,
the Constitution (One Hundred and First
Amendment) Act, 2016 was enacted on 8th
September, 2016 by the Parliament.

(iii) STAND OF TAMIL NADU ON GST

Tamil Nadu has been at the forefront of

protecting the rights of States and
preserving its fiscal autonomy. It may be
recalled that the Hon’ble Chief Minister had
envisioned the difficulties involved in
implementation of GST way back in 2014
and had cautioned that certain key issues
would have to be resolved in order to
 23

facilitate a smooth roll-out of GST. She had

consistently raised many issues among which
the following are noteworthy:
 The impact of the proposed GST
on the fiscal autonomy of States;
 The huge loss of revenue that
manufacturing and net exporting
States would suffer on account of
GST;
 The need to guarantee States
compensation for the loss
incurred on account of GST
through an independent
mechanism;

 The problem of loss of revenue

on account of lower tax rates on
declared goods;

 The need to keep petroleum

products and alcoholic liquor for
human consumption outside the
ambit of GST;
 24

 The issue of cross-

empowerment, under GST;

 The issue of dual control, under

GST;
 The need to empower the States
to tax transactions taking place
within its territorial waters;

 The fixing of thresholds and

exemptions from levy of tax
under GST; and
 Rates of tax under GST should be
Revenue Neutral.
Tamil Nadu had consistently raised
these issues in the Parliament as well as in
other forums. It was largely due to the
concerns voiced by Tamil Nadu that many of
the provisions of the Constitutional
Amendment Bill were suitably modified. After
enactment of the Constitution (One Hundred
and First Amendment) Act, 2016 by
 25

Parliament, Tamil Nadu continued to play a

proactive and positive role in the GST
Council to protect the rights of the State. In
the 18 meetings of the GST Council held so
far, Tamil Nadu has voiced many of its
concerns on various aspects of GST. As a
result, it has succeeded in getting many of
the issues redressed to its satisfaction,
namely:-
 Compensation to States for loss
sustained due to implementation
of GST
Compensation will be provided to
States in full for a period of five years
through an independent statutory
mechanism created for this purpose for
the loss arising out of implementation
of GST. The GST (Compensation to
States) Act, 2017 has been enacted to
determine the compensation payable
to the States in a fair and transparent
manner. A growth rate of 14 per cent
per year over the base year 2015-2016
has been adopted for the purpose of
 26

calculating the revenue of the States

for determining compensation;

The provision for special treatment of

Declared Goods has been removed
thereby protecting the revenue
interests of the State;
 Alcoholic liquor meant for human
consumption has been kept
outside the ambit of GST;

 Petroleum products have now

been kept outside the purview of
GST;
 The vexatious issue of cross
empowerment between the
Centre and the State in
administering the GST statutes
has been resolved amicably;

 All administrative control over

90% of taxpayers having
turnover below Rs.1.5 crore will
vest with State tax
administration and only 10% will
 27

be with the Central tax

administration. This will protect
the interests of the small traders.
Further, all administrative control
over taxpayers having turnover
above Rs.1.5 crore will be
divided equally in the ratio of
50:50 for the Central and State
tax administration;
 Power to collect GST in territorial
waters upto 12 nautical miles has
been delegated to the State
Government;

 Views of Tamil Nadu have been

incorporated in the draft GST
Laws, namely Central GST law,
IGST law, and Compensation law
before they were enacted by the
Parliament;
 28

 Similarly, the rates of tax on a

large number of goods has been
brought down due to the
proactive role undertaken by
Tamil Nadu.

(iv) ROLL OUT OF GOODS AND

SERVICES TAX

The provisions of the Constitution (One

Hundred and First Amendment) Act, 2016
were brought into force by the Government
of India on 16th September 2016. In order to
roll out GST across the country with effect
from 1st July 2017, the Government of India
enacted the Central GST Act, Integrated GST
Act, and the GST (Compensation to States)
Act. The States should also enact their own
SGST Law to pave way for levy of GST on
the supply of Goods and Services (other than
the Goods enumerated in Entry 54 of the
State List) as per the provisions of
 29

Article 246A of the Constitution of India.

Accordingly, the Tamil Nadu Goods and
Services Tax Act, 2017 was enacted by the
Tamil Nadu Legislative Assembly on 22nd
June 2017 and implemented with effect from
1st July 2017.

(v) SALIENT FEATURES OF GST

(i) The following Central taxes have been

subsumed under GST:-
a) Central Excise Duty;

b) Duties of Excise (Medicinal and

Toilet Preparations);
c) Additional Duties of Excise (Goods
of Special Importance);
d) Additional Duties of Excise (Textiles
and Textile Products);
e) Additional Duties of Customs
(commonly known as CVD);

f) Special Additional Duty of Customs

(SAD);

g) Service Tax; and

 30

h) Cesses and surcharges insofar as

they relate to supply of goods or
services;

(ii) The following State taxes have been

subsumed under GST:-

a) State VAT;

b) Central Sales Tax;

c) Purchase Tax;

d) Luxuries Tax;

e) Entry Tax (All forms);

f) Entertainments Tax (except those

levied by the local bodies);

g) Taxes on advertisements;

h) Taxes on lotteries; and

i) State cesses and surcharges insofar

as they relate to supply of goods or
services.

(iii) GST is a destination-based

consumption tax on the supply of
 31

goods and services and imports with

comprehensive and continuous chain
of set-off benefits of the taxes paid
from the producer’s as well as service
provider’s point upto the retailer’s
level. GST is collected from the end
consumer.
(iv) GST is, Central GST (CGST) and State
GST (SGST) levied concurrently by
the Centre and the States on all
transactions involving supply of goods
or services or both.
(v) GST will apply to all goods and
services except Alcoholic liquor for
human consumption.
(vi) Petroleum products have now been
kept outside the purview of GST for
the present.
 32

(vii) Tobacco and tobacco products are

subject to GST In addition, the Centre
would continue to levy Central Excise
Duty. As Compensation cess is
proposed to be levied on Tobacco and
tobacco products, levy of Additional
Excise Duty on these products has
been deferred.
(viii) Integrated Goods and Services Tax
(IGST), which is a sum of CGST and
SGST, is levied and collected on the
inter-State supply of goods and
services (including stock transfers) by
the Centre.
(ix) Exports are zero-rated.
(x) Imports are treated as inter-State
supplies.
(xi) Input Tax Credit (ITC) to be broad
based by making it available in
respect of taxes paid on any supply of
goods or services or both used or
intended to be used in the course or
furtherance of business.
 33

(xii) A common threshold exemption will

apply to both CGST and SGST.
Taxpayers with an annual turnover of
Rs. 20 lakh will be exempted from
GST. A compounding option (i.e. to
pay tax at a flat rate without credits)
is available to small taxpayers
(including specified category of
manufacturers and service providers)
having an annual turnover of up to
Rs.75 lakhs. The threshold exemption
and compounding scheme would be
optional.
(xiii) Electronic filing of returns can be done
by different class of persons at
different cut off dates.
(xiv) Various modes of payment of tax
available to the taxpayer including
internet banking, debit/ credit card
and National Electronic Funds Transfer
(NEFT) / Real Time Gross Settlement
(RTGS).
 34

(xv) Advance Ruling Authority has been

constituted in order to enable the
taxpayer to seek a binding clarity on
taxation matters from the
department.
(xvi) Elaborate transitional provisions have
been provided for smooth transition of
existing taxpayers to GST regime.

(vi) TAX RATES UNDER GST

Fixation of rates under GST is the
responsibility of the GST Council. There are
four slabs of GST rates, namely 5%, 12%,
18% and 28% for goods and services.
Besides, some goods and services are under
the list of exempt items. Certain supplies of
goods and services are to be paid on reverse
charge basis by the recipient of such goods
and services. Rate for precious metals has
been fixed at 3%. A cess over the peak rate
of 28% on certain specified luxury and
 35

demerit goods, like tobacco and tobacco

products, pan masala, aerated waters, motor
vehicles, will be imposed for a period of five
years to compensate States for any revenue
loss on account of implementation of GST.
The above rates of tax have been
recommended by the Council after taking
into account the present tax incidence on
account of Central Excise, Service Tax and
VAT (including cascading on account of these
taxes) as well as embedded taxes and the
incidence of CST, Entry Tax, etc. In certain
cases, the Fitment Committee comprising the
Central Government and State Governments
officials had recommended lower/higher GST
rates, vis-a-vis the present tax incidence
(including embedded taxes) taking into
consideration various aspects. However, in a
majority of supplies of goods, the tax
incidence approved by the GST Council is
 36

much lower than the present combined

indirect tax rates levied by the Centre and
the States. 81% of products are largely
taxed at the rate of 18% and below, and
only 19% of products are taxed at the rate
of 28%.
Tamil Nadu has been vocal in putting
forth its points with regard to fixation of
rates of tax and in highlighting specific issues
with regard to various sectors of the
economy. Due to the persistent efforts of the
State, the rates of tax on many items used
by the common man have either been
exempted or brought under the lower rate
category.

18 Sectoral Groups have been

constituted representing various sectors of
the economy and containing Senior Officers
of the Centre and the States to look into the
issues and problems of their respective
 37

sectors. In all these Sectoral Groups, officials

from Tamil Nadu have also been included.
They are interacting and examining the
representations received from trade and
industry associations/ Chambers of
Commerce of their respective sector. Specific
issues of the respective sector would be
highlighted before the GST Council and
Guidance Notes will be issued for smooth
transition to GST regime.
(vii) AWARENESS ON GOODS AND
SERVICES TAX
All transactions and processes under
GST will be done only through electronic
mode to achieve non-intrusive
administration. This will minimize taxpayers
physical interaction with the tax officials. The
Commercial Taxes Department in Tamil Nadu
has been totally computerized and all
transactions and processes, namely
registration, filing of returns, payment,
 38

generation of statutory forms are being

carried out electronically under the VAT
system of taxation. As the dealers in the
State are conversant with electronic mode of
transactions with the Department, there has
been hassle-free transition to GST system.
The fact that 91% of the existing dealers
under VAT have successfully migrated to the
GST platform is an indication of this.
The Commercial Taxes Department has
launched an extensive programme to spread
awareness about GST among the
stakeholders and to remove any doubts that
may arise regarding its implementation. As
part of this programme, the Department
conducted a State-level GST awareness
workshop presided over by Hon’ble Minister
for Fisheries, Finance and P&AR and Hon’ble
Minister for Commercial Taxes in Chennai on
28.6.2017. A total of 712 workshops are
 39

being conducted across the Commercial

Taxes Assessment Circles and Commercial
Taxes Districts.
(viii) HELP DESKS

Helpdesks have been set up in each

assessment circle and Facilitation Centres in
every Commercial Taxes Districts for
providing assistance to taxpayers. GSTN Toll-
free helpline (01204888999) and CT Toll-free
helpline (18001036751) have also been
established to clear doubts raised by dealers.
Extensive multi-media campaign through
print and electronic media has also been
carried out for informing, educating, and
assisting taxpayers and other stakeholders
for smooth transition to GST.
The Department is committed to
render all support to the dealers in Tamil
Nadu in their efforts towards a smooth
transition to GST.
 40

8. TRADERS WELFARE

i) Traders Welfare Board

Tamil Nadu Traders Welfare Board was

constituted for implementing several welfare
schemes for the traders. The welfare
schemes are implemented through the
interest received from the corpus fund, which
was increased in 2012 from Rs.2 crore to
Rs.5 crore by the Government to the Board
and the matching grant given by the
Government, equal to the one time
membership fee received from the members.
As announced by the former Chief Minister
under Rule 110 on the floor of the Assembly
on 31.08.2016, the Board’s corpus fund has
been increased from Rs.5 crore to Rs.10
crore.
 41

ii) Renewal of membership fee

The Government have done away with

the requirement of annual renewal of
membership and have extended the
membership to small dealers, who are doing
business by obtaining necessary license from
the concerned local bodies, even if they are
not registered under the Tamil Nadu Value
Added Tax Act, 2006 or are not paying
professional tax.

iii) Welfare Schemes

Various welfare schemes viz., family

assistance, medical assistance, educational
assistance, etc., are being provided by the
Traders Welfare Board to their members and
their families.
 42

9. COMPUTERISATION

i) Total Solution Project

The Government sanctioned Rs.230.95

crores for implementing end to end Total
Computerization Project for five years and
finalized the bid value to the tune of
Rs.179.98 crore. M/s. Tata Consultancy
Services Ltd was entrusted as the System
Integrator for this Project.
The prime objectives of this Project are:

 Improve service delivery for the

dealers

 Providing anytime anywhere access

to Services

 Reduction in service turn around

time and minimal physical
interaction with the Department

 Increased channels for service

delivery
 43

 Transparency in service delivery

 Support the Department in

achieving its goal of enhanced
revenue collection

 System aided decision making in

core Tax processes

 Greater G2G collaboration

 Simplification and streamlining of

the procedures of the Department
and reduction of cumbersome, time-
consuming and non-value adding
activities of the Department so that
the staff can spend their time on
core activities

 Enhanced Analytics and reporting

capabilities and business
intelligence for system aided
decision making.

The Project was inaugurated by the

Hon’ble Chief Minister of Tamil Nadu on
29.01.2016.
 44

Following facilities are made available

to the dealers of Tamil Nadu through this
Project:-

ii) Online Registration

The dealers have been provided with

the facility to apply for Registration
Certificate online. The dealers can get the
TIN Registration certificates on successful
submission of application and supporting
documents through online, without visiting
the Assessment Circle in person.

iii) Online generation of Checkpost

forms (JJ, KK, LL and MM)

The facility to generate the Checkpost

forms for the movement of goods viz., Forms
JJ, KK, LL and MM have been provided to the
dealers through the portal
https://ctd.tn.gov.in. without visiting the
Commercial Tax offices.
 45

iv) Filing of returns

The dealers have been facilitated to file
the monthly returns (from the return month
June 2016) through the new portal
https://ctd.tn.gov.in in the new format and
Annexures. Presently, about 4,35,000
dealers are filing their monthly returns
through online.
v) e-payment

e-payment of taxes through online and

offline payment has also been implemented
through the new portal https://ctd.tn.gov.in.
Online payment can be made through 31
Banks and offline payment can be made at
the Branch counters of 6 Banks authorized
by the Government.

Presently, about Rs.5,200 crores (95%

of total CT revenue) is being collected from
around 1,70,000 dealers every month
through e-payment facility.
 46

vi) Online issue of ‘C’ & ‘F’ forms

The facility of generating the online ‘C’ &
‘F’ forms has been provided to the dealers,
based on the monthly returns filed by them
from November 2012. Through this facility,
the visit of the dealers to the Assessment
Circles for obtaining the forms has been
minimized. At present, all the statutory
forms (C, F and H) can be generated
through online.

vii) Refund request for exporters

The filing of Form ‘W’ return has been

prescribed for the exporters who claim the
refund of Input Tax credit on their zero rated
sales. Introduction of e-filing of Form ‘W’
has made the process of refund to the
exporters faster, when compared to the
manual system. Starting from applying for
 47

refund upto the approval and generation of

proceedings can be done through online.
The status of the refund claim is updated in
the website and therefore, the interface
between the Department and Dealer is kept
at the minimum. In order to validate the
export sales, a Memorandum of
Understanding (MOU) has been signed with
Directorate General of Foreign Trade (DGFT)
for verifying Electronic Bank Realization
Certificate (e-BRC).

viii) e-filing of Annual Returns

E-Filing facility has been provided to

dealers for filing Annual Returns. More than
4 lakh dealers have filed Returns online for
the year 2016-17.

ix) Other online Services

The following facilities / services are
also available in the website
 48

https://ctd.tn.gov.in, for the mercantile

public:
 Viewing and downloading of the
Acts & Rules, Forms, Circulars,
Clarifications, Government
Orders and Notifications issued.

 The facility to view dealer

payment history and profile
(Dealer’s Ledger).

 The facility to know the rate of

tax and schedule of
commodities.

 The facility to know details of

dealers by entering their TIN or
Name.

x) Intranet facilities to the Department

1. All the work in the Assessment Circle

relating to the dealers are done through
software with a work flow system
2. Digital Signature Certificate has been
provided to all the officials in the
Assessment Circle from and above
 49

Deputy Commercial Tax Officer cadre for

generating the digitally signed TIN
Registration Certificate.
3. Assessment of dealers is completely
driven through system.

4. All the Statistical reports have been

provided through online.
5. Tax Revenue reports based on online and
offline payment of taxes have also been
provided through system.

xi) Dealers migration to GST Portal

As Goods and Services Tax (GST) has

been implemented with effect from 1.7.2017,
all existing dealers under Tamil Nadu Value
Added Tax have to be migrated to the GST
portal. Special camps have been conducted
in important cities and towns to help the
dealers in completing their registration in the
GST Portal.
 50

So far, more than 91% of the dealers

registered in Commercial Taxes Department,
have completed their enrolment in the GST
Portal.

xii) Data Retrieval Lab

The Data Retrieval Lab established in
the department enables the officials to arrest
the IT enabled evasion and different kinds of
sophisticated trade malpractices by
processing the data seized from the dealers,
which have been stored in different storage
devices and deciphering the suppressed
transactions.

10. INFRASTRUCTURE DEVELOPMENT

A. Construction of own buildings for

Commercial Tax Assessment Circles
other than Chennai

In order to provide better facilities to

the staff and visiting traders and to provide
good working environment, sanction
 51

was accorded for construction of 16 buildings

in various locations for housing 39 offices of
the Department at a cost of Rs.23 crores
during the year 2011-2012. Out of 16,
construction works have been completed in
15 buildings and the offices are
functioning now.

During the year 2012-2013, sanction

was accorded for construction of own
buildings in 10 places for housing 16 offices
at a cost of Rs.11.18 crores. In all the
places, construction works have been
completed and the offices are functioning.

During the year 2013-2014, sanction

was accorded for construction of own
buildings in 7 places for housing 9 offices at
a cost of Rs.10.93 crores, based on the
announcement made by the Hon’ble Chief
Minister under Rule 110 on the floor of the
 52

Assembly on 13.05.2013. Construction

works have been completed in all places and
the offices are functioning now.

B. Construction of own buildings for

Commercial Tax Assessment Circles
in Chennai

On 07.08.2014 an announcement was

made by the Hon’ble Chief Minister under
Rule 110 on the floor of the Assembly that
two Commercial Tax Complexes, one in
South and another in North Chennai for
housing the Commercial Taxes offices
functioning in private buildings, i.e., 70
Assessment Circles and Large Tax Payers
Unit in Chennai will be constructed at a cost
of Rs.60 crores. Accordingly, action is being
taken to Construct an Integrated building to
accommodate 52 Commercial Taxes Offices
and 4 Registration Department Offices in
South Chennai at a cost of Rs.51.98 crores.
 53

The Government have also sanctioned a sum

of Rs.25.25 crores for construction of an
Integrated complex in North Chennai for
housing 34 Commercial Taxes Offices and
construction works is in progress.

C. Construction of Integrated
Commercial Tax Office building

As announced by the Hon’ble Minister

for Commercial Taxes and Registration
during the demand for grants for the year
2015-16 in the Assembly on 21.09.2015, the
Government have accorded sanction for a
sum of Rs.10 crores for construction of an
Integrated Office Complex at Nazarathpettai
in Poonamallee Taluk of Tiruvallur District, to
accommodate 17 Commercial Tax Offices.
Now, preliminary work is in progress for
construction of the building.
 54

D. Construction of own buildings for

Commercial Tax assessment circles

On 31.08.2016, an announcement was

made by the Hon’ble Chief Minister under
Rule 110 on the floor of the Assembly that
buildings will be constructed at Krishnagiri,
Namakkal and Palani, so as to accommodate
9 Commercial Tax offices. Accordingly, the
Government have accorded administrative
and financial sanction for a sum of Rs.6.40
crores for the construction of Commercial
Tax office building in the above said places.
Construction work will be commenced during
the year 2017-2018.

E. Additional Fund for Building

Maintenance

As announced by the Hon’ble Minister

for Commercial Taxes and Registration
during the demand for grants for the year
2015-16 in the Assembly on 21.09.2015, the
 55

Government sanctioned a sum of Rs.5.20

crores for carrying out the civil and electrical
works, and to provide modular furniture,
etc., through Public Works Department and
TANSI in various Commercial Tax Offices
housed in Government buildings.
G. Purchase of Vehicles

There are 238 vehicles sanctioned for

the Department, of which 217 are in
roadworthy condition. Condemned vehicles
are promptly replaced by the department
with equal number of new vehicles.
During 2012-2013, 16 vehicles were
purchased at a cost of Rs.86.38 lakhs.
During the year 2014-2015, 22
vehicles were purchased at a cost of
Rs.124.12 lakhs.
During the year 2015-2016, 14
vehicles were purchased at a cost of
Rs.84.31 lakhs.
 56

During the year 2016-2017, 5 vehicles

were purchased at a cost of Rs.29.58 lakhs.
It has been proposed to purchase 10
Bolero Jeeps at a cost of Rs.65.68 lakhs for
the year 2017-2018.

11. RIGHT TO INFORMATION ACT, 2005

Right to Information Act, 2005 was
enacted to bring transparency in the working
of Government Organisations. The
Commercial Taxes Department with fairly
large amount of direct interaction with the
mercantile public, ensures that the activities
of the Department are conducted in a clear,
simple and transparent manner. Towards
this objective, the Department gives special
importance to all the petitions received
under the Right to Information Act, 2005 and
replies are sent promptly to the applicants in
all the cases.

K.C.VEERAMANI
MINISTER FOR COMMERCIAL TAXES