Nuances of VAT Returns Filing in Maharashtra

The system of Value Added Tax (VAT) has been implemented, in the State of Maharashtra, w.e.f. 1st April, 2005.

Registration 

Every dealer, who becomes liable to pay tax under the provisions of MVAT, shall apply electronically for registration to the prescribed authority, in Form 101, within 30 days from the date of such liability.

Every registered dealer shall be required to file correct, complete and self-consistent return, in prescribed form, by the due date.

Periodicity and due date:–

For the periods commencing from 1-4-2008

Sr. No.	Category	Periodicity
1.	A)Newly registered dealers (up to 30-4-2010) B) Retailers opted for composition Scheme C) Tax liability, in the previous year, up to Rs. 1 lakh  or Refund entitlement up to Rs. 10 lakhs.	Half Yearly
2.	A) Dealers under Package Scheme of Incentive B) Tax liability, in the previous year, exceeds  Rs. 1 lakh but up to Rs. 10 lakhs or refund  entitlement exceeds Rs. 10 lakhs but up to Rs.1 crore. C) Newly registered dealers (w.e.f.1-5-2010)	Quarterly
3.	All other dealers whose tax liability, in the  previous year, exceeds Rs. 10 lakhs or  refund entitlement exceeding Rs. 1 crore	Monthly

Due Dates for Filing Returns

1. Monthly and Quarterly Returns – 21 days from the end of month/quarter
2. Half Yearly Returns -- 30 days from the end of six monthly period
   
   
   
   

VAT AUDIT CAUSES AND CONSEQUENCES

What is Sales Tax??? 

 

Sales tax is levied on the sale of movable goods. Most of the Indian States have replaced Sales tax with a new Value Added Tax (VAT) since 2005. VAT is a state levy. VAT is applied on each stage of sale with a mechanism of credit for the input VAT paid on purchases.

The system of VAT is based on the self-assessment and declarations made by the Dealer. In other words, the dealer is supposed to calculate his sales tax liability and file periodical returns as applicable to him and pay taxes accordingly.

Statutory audit provision introduced by the state which helps them in determining the under assessment made by the dealer if any, and thereby requiring for additional payment of tax is known as VAT Audit.

So now question arising would be what is Sales tax Audit & to whom it is applicable??

Sales tax audit is applicable to a dealer holding a valid registration certificate of MVAT and liable to pay tax and his turnover, either of sales or purchases, exceeds Rs. 60 Lakhs during the Financial Year. However the turnover limit for compulsory audit under the MVAT Act, from the Financial Year 2013-14 is increased from INR 60 lakhs to INR 1 crore.

So it is mandatory to file Audit Report in form 704 if dealer is in above criteria, as it helps the department to emphasize more on correctness and accuracy of the tax liability of the dealer based on his books of accounts. This form 704 needs to be filed before the prescribed due date by the dealer.

What if VAT Audit Report not filed???

Dealer can be charged penalty equal to 0.1% of Turnover of Sales or Purchases and can be prosecuted for imprisonment for 6 months.

Sales tax department has published a list of dealers called as Nonfilers, who have failed to file the VAT Audit Report, which affects the goodwill of the enterprise or company. 

 

Vat Audit report not filed earlier can be filed now???

Yes!! Vat audit report can be filed for all years under non-compliance. Levying of penalty would be discretionary depending on the justifications submitted to the Sales tax Department after filing of Vat Audit report.

Dealers who have not filed their VAT Audit reports should be taking Immediate decision to comply, which in turn will help to reduce the penalty if done upfront.

Please feel free to contact us or drop a line, if you require any help for the above issues.