Understanding MVAT. By CMA DILIP M. BATHIJA Practising Cost Accountant Email- [email protected] Mb : 8600697765/ 9422478735. How & When MVAT started?. The MVAT Act came into effect from 1-4- 2005.
TheMVAT Act came into effect from 1-4- 2005.
The BST Act, Works contract Act, Lease Act, & Bombay motor sprit taxation Act merged into MVAT Act.
Uniformity in rates of Taxation.
No declaration Forms.
Larger tax base.
1.Normal Registration based on Turnover.
2. Voluntary Registration.
Documents required for Registration.
1. Proof of constitution of Business.
2. Proof of place of Business.
3. Copy of PAN Card.
4. Proof of Residential Address.
Passport, Driving licenses, Election card,
Property card, Electricity bill, (any two).
5. Two Photos.
6. One cancelled cheque.
7. Letter of Authority.
1. Application to be made within 30 days in Form 101.
2. Documents verification on the Called day.
3. Allotment of TIN number.
4. Dealer’s enrolment after registration.
5. Advisory Visit.
1. Change in the Name of business.
2. Change in constitution of Firm without dissolution.
3. Change in trustee of any trust.
4. Change in Karta of HUF.
5. Conversion of Pvt Ltd. company to Public Ltd. company.
6. New products to be purchased from outside state.
7. Opening or closing of any place of additional Business, or shifting of place of business.
Intimation to be given within 60 days.
Net sale VAT Net sale VAT OMS CST Total
12.5% 12.5 % 5 % 5 % sale basic 2 %
Net amt. VAT Net amt. VAT OMS CST Total
12.5% 12.5 % 5 % 5 % basic 2 %
Total tax on purchase
Less: tax on negative list as per rule 54.
Less: Reduction under rule 53
Tax payable on sales
Less: Available set-off
Balance tax payable
1. Type of Forms
1. First year - Quarterly returns.
2. Subsequent year – Depending on previous year’s tax liability as given below:
Refund > 1 Cr.
Refund upto 10 Lakhs
Refund Between 10 Lakhs - 1 Cr.
1. No CST return to be filed, if there is no OMS sale.
2. All tax payments to be made by E-payment, in MTR-6 challan.
3. All returns to be E-filed.
4. Annexures J-1 & J-2 to be filed with regular returns.
5. Revised return can be filed within prescribed time.
1.Computerised Desk Audit (CDA) for 2011-12.
i. Audit parameters
Set off from non genuine suppliers
Set off from TINS not in department’s data base
Set off from registration cancelled suppliers
Set off from suppliers who are non return filers for the complete year.
set off from suppliers who are composition dealers
Set off from suppliers not showing taxable sales in returns
Excess set off due to mismatch of J2 of buyer with J1 of supplier
Amt. payable as per VAT audit report.
ii. CDA compliance system available on the website, communication to the dealer in Form 604 A.
iii. Payment of due tax & interest, and filing of revised annual return.
iv. Compliance to the CDA to be filed on the website before 3rd sept.2014
v. Communication of case closer in Form 605.
2. Concession in late fees due to delay in filing of Returns.
i. If return is filed within 30 days from the expiry of due date, late fees Rs.2000/- only
ii. If delay is beyond 30 days late fees payable Rs.5000/-
iii. For defaults relating to returns of old periods upto February 2014 returns can be filed by paying late fee of Rs.1000/- per return scheme available upto 30th sept, 2014.
1. Business Audit
This Audit is done by the dept.
2. Audit U/s 61 by CA/CMA
i. If turnover of Sales plus OMS branch transfers, or if turnover of Purchases exceeds Rs. 1 Cr. Audit applicable
ii. Last date for Audit report filing 15 January of next year.
iii. Penalty for non filing of Audit report, 0.1 % of total sales.
iv. Audit report to be filed in Form no. 704
Factors to be considered:
1. Turnover of client.
2. Number of Business locations.
3. Number of sales & Purchase transactions.
4. Composition of Sales.
5. Periodicity of filing returns.
1. Sales .
3. Set-off availed.
4. Tax Payments & Interest for delay, if any.
5. Deductions claimed.
6. Declarations received.
7. TDS Compliances.
8. Reconciliation of turnover of sales & purchase as per returns with Trading, P & L Account.
9. Asset purchases and Sales.
1. Applicable to payments made for Works contracts.
2. Rate of TDS: 2 % if contractor is RD, 5 % if URD.
3. No deduction if aggregate amt in a year is less than Rs. 5 lakhs, in case of Co-op Hsg. Soc.,this limit is Rs.10 lakhs.
4. Deduction on the date of payment or credit whichever is earlier.
5. No need to obtain tax deduction Account number.
6. Interest @ 1.25% per month for late payment.
7. TDS payment by 21st of next month.
8. TDS certificate to be issued in Form No. 402
9. E TDS return in Form 424 to be filed.
10. Register to be maintain in Form No. 404.
11. Annual TDS return to be filed in Form No 405 within 3 months from the end of year.
12. Who has to deduct TDS:
i. Company registered under the Companies Act.
ii. A registered dealer under MVAT Act.
iv. Co-op. Housing Society registered under MCS Act.
V. Societies registered under Societies Act.
vi. Insurance or Finance corporation or Company & Bank included in the second schedule to the RBI Act & any scheduled Bank.
Vii. A Local authority.
viii. All industrial, Commercial or Trading undertakings, Company or corporations of Central/State govt. & Port trust.
ix. Central or State Government.
1. Purchase invoice must be in the form of Tax Invoice.
2. Tax charged separately.
3. Record of Purchases to be maintained.
4. Tax must have been paid into the Govt. treasury by supplier of goods.
This presentation is prepared for CEP organised by WIRC- ICAI on 23rd August, 2014.
It is prepared on the basis of laws prevalent at the time of making presentation .
Given the constraints of space & time, it explains in a summarised manner the important points relating to matters covered in the presentation.
One should refer the provisions of relevant laws for proper interpretation and understanding.