EXEMPTION UNDER SECTION 54 AND 54F

Even amidst  the days when tax department is tightening its grip over the soft and easily bendable neck  of the taxpayer, there are still two sections which are most favorite sections  of the assesses in general and people in housing and reality sector in particular. Both section 54 and 54F have normally been liberally construed by our judiciary and are vital blood vessel of housing infrastructure of our economy and of course at the same time they are heart beat of chapter IV-E on Capital Gains Taxation.  Liberal Interpretation of Section 54 and 54F has been influenced by two important Rules of Interpretation.

Issues in Single Stage Taxation system in Punjab

Single Stage Taxation system, now while it is flowing and roaring in the taxation system of Punjab requires attention at a few subtle points:

1.      Not Supported by appropriate Legislation

Schedule A and Schedule E have been amended to give effect to single stage taxation system. While Schedule A has its genesis in Section 16, Schedule E bears its roots in Section 8. As per Schedule A , specified commodities have been made tax free at wholesaler or distributor or retailer stage. However, section 16 bears no relation with stages of goods

At the same time, Schedule E has made specified goods taxable at first point of Sale i.e. manufacturer or first importer, while section 8 has not been amended at all .

                        Hence first point taxation system at first instance appears to be ultra vires the provisions of Punjab Vat Act.