1. Presently, deposit of Rs. 25,000 made at the time of registration is allowed to be adjusted against tax liability of the period in which registration was granted and in the subsequent year.
2. From 1 May 2011 such adjustment will not be allowed and the dealer is required to file claim for refund of such deposit.
3. Security deposit made after 1 May 2011, will be refunded, if the refund application is made within the time prescribed in Rule 60A which is as below:
– In case of cancellation of Registration Certificate (RC) within 36 Months of Registration: Within 36 months date of service of the order of the cancellation of the RC
– In other cases: After 36 months from the end of the month containing the date of effect of the registration but before the end of the period of 48 months from the end of the month containing said date.
4. As per section 50(1) the Commissioner has a power to refund Security Deposit made under section 16 along with refund of excess payment of tax, penalty, interest and fee (except when the fee is paid by way of court-fee stamp).
A N A R & Co 