MAH-VAT Presentation.ppt

7/21/2019 MAH-VAT Presentation.ppt

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TITLE AND SCOPE OF MVAT ACT

Act may be called the Maharashtra Value Added TaxACT, (Levy and Amendment) Act, 2005

It shall come into force with effect from such date as thestate Government may appoint by notification in theOfficial Gazette.

Following earlier Acts have been repealed and merged into VAT

a) The Bombay Sales Tax Act 1959

b) The Maharashtra Sales Tax on Transfer of Property in

goods involved in execution of Works Contract(Re-enacted) Act, 1989

c) The Maharashtra Sales Tax on Transfer of Right touse any goods for any purpose Act 1985

d) Bombay Sales of Motor Spirit Taxation Act 1985


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IMPORTANT CHANGES IN DEFINITION

BUSINESS : Includes Service.

DEALER : Includes person engaged in business ofdeemed sales like Works Contract, Lease Contract, andan Auctioneer and Trust.

PURCHASE PRICE : Purchase price includes purchaseprice for Works Contract.

SALE :Includes deemed sale.

SALE PRICE: Sale price includes sale price for WorksContract.

SERVICE: Means services as may be notified by thestate government.

TAX : Includes any amount payable by way ofcomposition but does not include purchase tax.


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THRESHOLD LIMIT FOR REGISTRATION

DEALER

TURNOVER OF

TAXABLE

GOODS

TOTAL TURNOVER

Importer 10,000 1,00,000

Other Dealers 10,000 5,00,000

Voluntarily

Registered Dealer N.A. N.A.

CST RC Holder N.A. N.A.


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RATES OF TAXES UNDER MVAT ACT

Sr.

No. Description of goods Rate of Tax Schedule

1 Goods of daily necessities Nil A

2 Gold, Silver, Precious Stones

and articles of Jewellery1% B

3 Declared goods, Rawmaterials, Telecom products,

IT products, Industrial inputs,

Notified capital goods, Bulk

drugs etc.

4% C

4 Indian made foreign liquor and

country liquor 20%

D

5 Various products of Motor

Spirit28 to 34% E

6 All goods not listed in any of

the above schedule12.5% F


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MECHANISM OF VAT

Dealer

Manufact-urers

price /

Resellers

input cost

Less :Input

Tax

Credit

Net

Purchase

Price

Value

Addition

(Margin)

Sale

Price

Tax @

10%

Tax paid

to Govt.

Manufa-

cturer

100 - 100 - 100 10 10

2nd

Seller110 -10 100 50 150 15 5

3rd

Seller165 -15 150 50 200 20 5

4th

Seller220 -20 200 50 250 25 5

Total 595 -45 550 150 700 70 25


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IMPACT ON MANUFACTURERS SELLING PRICE

WHERE INPUT SOURCED FROM VARIOUS SOURCES

SOURCES

AND

UTILISATION

OF INPUT

% OF

INPUT

USED

IN

MFGR.

INPUT

USED

IN

MFGR.

(Rs.)

TAX

INCIDE

NCE ON

INPUT

(Rs.)

COST OF

INPUT

USED IN

MFGR.

(Rs.)

LESS:

INPUT

TAXCREDIT

( Rs.)

NET

COST OF

INPUT

(Rs.)

OTHER

OVERHE

ADS AND

MARGIN

( Rs. )

MAFRS

SELLING

PRICE

Local

purchases

used in FG for

sale from

state of

manufacture

40% 40.00 5.00

@ 12.5%

45.00 5.00

@ 12.5%

40.00

100.00 202.00

Local

purchases

used in FG for

Branch

Transfer

outside state

30% 30.00 3.75

@12.5%

33.75 2.55

@ 8.5%

31.20

Interstate

purchasesused in FG for

sale

20% 20.00 0.80

@ 4%

20.80 Nil

(No ITCon CST)

20.80

Imports used

in FG for sale

10% 10.00 Nil

(No tax

on

Import)

10.00 Nil

( No ITC

on

Imports)

10.00

TOTAL 100% 100.00 9.55 109.55 7.55 102.00


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IMPACT ON CONSUMERS PRICE WHERE GOODS

SOLD WITHIN THE STATE OF MANUFACTURE

DISTRIBUTION

CHAIN

INPUT

COST

( Rs. )

LESS:

INPUT

TAX

CREDIT

(Rs. )

NET

INPUT

COST

(Rs.)

MARGIN

%

MARGIN

AMOUNT

(Rs.)

SELLING

PRICE

(Rs. )

TAX

APPLIC

ABLE

(Rs.)

GROSS

SELLING

PRICE

(Rs.)

Sale by

Manufacturerto whole seller

within state

202.00 N.A.

(Included

in price)

202.00 N.A.

(Include

d inprice)

N.A.

(Included

in price)

202.00 25.25

@ 12.5 %

227.25

Sale by Whole

Seller to

Retailer within

state

227.25 25.25 202.00 15 % 30.30 232.30 29.03

@ 12.5%

261.33

Sale by

Retailer to

Consumer

within state

261.33 29.03 232.30 10 % 23.23 255.53 31.94

@ 12.5 %

287.47


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IMPACT ON CONSUMERS PRICE WHERE GOODS SOLD

THROUGH BRANCH TRANSFER OUTSIDE

THE STATE OF MANUFACTURE

DISTRIBUTIONCHAIN

INPUTCOST

( Rs. )

LESS:INPUT

TAX

CREDIT

(Rs. )

NETINPUT

COST

(Rs.)

MARGIN%

MARGINAMOUNT

(Rs.)

SELLIN

G

PRICE

(Rs. )

TAXAPPLIC

ABLE

(Rs.)

GROSSSELLIN

GPRICE

(Rs.)

Transfer by

Manufacturer

to Branch

outside state

202.00 N.A.

(Includ

ed in

price)

202.00 N.A.

(Included

in price)

N.A.

(Included

in price)

202.00 N. A.

( No

tax on

BT)

202.00

Sale by Branch

to Whole

Seller in

transferee

state

202.00 N. A.

No ITC

on BT)

202.00 N. A.

(Included

in price)

N. A.

(Included

in price)

202.00 25.25

@12.5%

227.25

Sale by Whole

Seller toRetailer in

transferee

state

227.25 25.25 202.00 15% 30.30 232.30 29.03

@12.5%

261.33

Sale by

Retailer to

Consumer in

transferee

state

261.33 29.03 232.30 10% 23.23 255.53 31.94

@12.5%

287.47


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TAX INVOICE

A registered dealer under MVAT Act selling taxablegoods to another registered dealer has to issue a TaxInvoice in the prescribed format.

The tax invoice should be preserved for three years fromthe end of the year in which the invoice is raised.

Provision of Tax invoice is not applicable for

a) the transactions effected under CST Act,

b) Dealers paying tax under composition.

c) Unregistered dealers.

Bill or Cash Memo can be issued by registered dealerpaying tax under composition (other than a workscontractor) or by an unregistered dealer.


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TAX INVOICE

Tecnimont ICB Pvt. Ltd.

Chincholi Bunder, 504, Link Road , Malad (W), MUMBAI 400 062

ST RC No. Dt.

Invoice to Invoice L/R R/R No.

M/s Phillips India limited Date Date

Andheri (East), D/Note No. P.O. No.

Mumbai400 093 Date Date

Customers RC No. Date

Sr. No. Description of Goods Quantity Rate Amount

Total

Trade discount

Packing Material

Octroi

Freight

VAT @

CST @

Total

I/We hereby certify that my/our registration certificate under the Maharashtra Value Added Tax Act,

2002 is in force on the date on which the sale of the goods specified in this tax invoice is made by

me/us and that the transaction of sale covered by this tax invoice has been effected by me/us and it

shall be accounted for in turnover of sales while filing of returns and the due tax, if any, payable on

the sale has been paid or shall be paid.

for Tecnimont ICB Pvt. Ltd.,

Sd


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TAXABLE TURNOVER NON COMPOSITION

METHOD

Taxable turnover of registered dealers under non-composition

method for various types of sale transactions can be

determined as follows:

1) Transactions of sale of goods : Total Sale price asdetermined by the contract of sale.

2) Lease transaction : Total lease rentals as per lease

agreement for predetermined period.

3) Hire purchase transaction :Installment representing saleprice receivable during predetermined period.

4) Works Contract Transactions : Turnover determined by

choosing either of the following methods:


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WORKS CONTRACT TURNOVER NON

COMPOSITION METHOD

A) Where prescribed deductions can be estimated from

books of account :

Total Contact Value : xxxxxx

Less : Prescribed deductions:

a) Labour charges for execution of

Works Contract xxxx

b) Amount paid to subcontractor xxxx

c) Charges for planning designing &

Architectsfees xxxx

d) Charges for acquiring machines, tools etc. xxxx

e) Cost of consumable in which property does

not pass to contractee xxxx

f) Cost of establishment relating to supply of

labour and services xxxx

g) Other expenses relating to supply of labour

and services xxxx

h) Profit of contractor relating to labour

& services xxxx

------------BALANCE = Taxable Amount xxxxx


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WORKS CONTRACT TURNOVER NON

COMPOSITION METHOD

A) Where prescribed deductions cannot be estimated from

books of account : Turnover = Total Contract Value

Less : following Deductions

Sr.No. Nature of Contract % of deduction

1. Installation of Plant and Machinery 15

2. Installation of Air Conditioner and cooler 10

3. Installation of Elevators 154. Fixing of marble slabs, granite & tiles 25

5. Civil works like construction of Bldg. Roads etc. 30

6. Construction of Railway Coaches etc. 30

7. Ship and Boat building etc. 20

8. Sanitary Fittings, Plumbing, Drainage etc. 15

9. Painting and Polishing 20

10. Construction of Motor Vehicles and Trucks 20

11. Laying Pipes 20

12. Tyre re-trading 40

13. Dyeing and printing of Textile 40

14. Any Other Works Contract 20


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TAXABILITY UNDER COMPOSTION METHOD

Composition options for payment of tax are available to

following dealers under MVAT Act :

1) Works Contractor :

Total Contract Value x x x x x x

Less : Amount payable to sub-contractor x x x x x

-------------------

Balance Contract value = Taxable Turnover x x x x x x

Tax @ 8% on the Taxable Turnover = x x x x x

Less: Set-Off @ 16/25 i. e. 64% of x x x x x

local tax paid on purchases

------------------

Balance Tax payable x x x x x

------------------


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2) Retailer :

Types of

Dealers

Nature of sale se

transactions

Rate of composition Conditions

Retailers

whose at

least 90%

of the sale

is directly

made to

customers

who arenot dealers

Resale made by a

registered dealer

of any goods

excluding

a) Foreign Liquor

b) Country Liquor

c) Drugs and

d) Motor Spirits

8 % of profit elements

arrived at as given

below:

Six monthly turnover

of eligible sales

Less :

Six monthly turnover

of purchases effected

from registered dealer

including the amount

of tax paid separately

1. Application should

be made in Form 4

2. Selling dealer does

not collect tax

separately.

3. Selling dealer

does not claim

set-off on input

4. For first six

monthly periodstarting from 1st

April 2005, only

5/6thof the

turnover should be

considered

instead of full

100% turnover.


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3) Restaurants, Clubs and Hotels :

Types of

Dealers

Nature of sale or purchase

transactions

Rate of

composition

Conditions

Restaurants,

Clubs and

Hotels

Total sale of food and non-

alcoholic drinks served other

than by Four Star and aboveRestaurants and Hotels

8% of T.O. of

sales by

registered

dealers

10% of T.O.

of sales in

case ofun-registered

dealers

1. Application

should be

made in

Form-1

1) Dealer is

not entitled

for ITC or

refund

2 ) Dealer shall

not collect

tax separately

from customer


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4) Caterers :

Types of

Dealers

Nature of sale or purchase

transactions

Rate of

composition

Conditions

Caterers Sale of food and non-

alcoholic drinks served at

any place other than

Restaurant

6% of T.O. of

sales by

registered

dealers

8% of T.O.of

sale by

unregistered

dealer

1. Application

should be

made in

Form 2

2. Dealer is

not entitled

for ITC or

refund

3. Dealer shall

not collect

tax separately

from customer


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5) Bakers :

Types

of

Dealers

Nature of sale or

purchase

transactions

Rate of composition Conditions

Bakers Total sale of bakery

products

4% of

turnoverof sale for

1) Registered Bakery

owner having

turnover of less than

Rs. 30L in the

previous year

6% ofturnoverof

sale for

2) Un-registered

dealer having

annual turnover

not less than

30L

1. Application

should be

made in

Form - 3

2. Dealer is not

entitled for

ITC or refund


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RETURNS

No provision for Annual Return.

Every Registered dealer shall file a Correct, Complete and selfconsistentReturn in prescribed Form.

The Return shall be deemed complete and self consistent if

a) Details provided in the return form are filled in fully.

b) All the items in return such as sales & purchase turnover,claims of set-off, claims for goods return, calculation of tax,details of payments and eligible deductions are provided and

are arithmetically self consistent.

Monthly returns will be audited by a Chartered Accountantand scrutinized by the Department.


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RETURNS

Defect Memo :

If the Return is not complete and self consistent, thecommissioner may serve on the dealer a Defect Memo.

After receipt of the Defect Memo the dealer has tocorrect the defect memo and submit a fresh selfconsistent and complete return within one month fromthe service of the Defect Memo.

Revised Return :

Revised return U/S 20(5) can be filed any time beforethe notice for assessment is served

OR

Before the expiry of six months from end of the year inwhich said return is furnished, whichever is earlier.


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RETURNS

Periodicity for filing Returns and Payment of taxes under MVAT Act.

Sr. No. Dealer Tax Liability

Rs.

period Due date Form

No.

1. Registered Dealer Exceeding

1,00,000

Monthly 20th day of the

following month forJan. & Feb. and 25th

day for rest of the

months.

201

2. Registered dealer Between12001

to 1,00,000

Quarterly Within 25 day from

the end of the period

of the quarter.202

3. Registered dealer Up to 12000 6 Monthly Within 25 day from


of 6 month.203

4. Registered dealer

opted for

composition

Not prescribed

as yet

6 Monthly Within 25 day from


of 6 month.204

5 Restaurants optingfor composition

As prescribed As may beprescribed

As may beprescribed

205

6. Bakeries opting for

composition

As prescribed As may be

prescribed

As may be

prescribed

206

7. Second Hand Car

dealer

As Prescribed As may be

prescribed

As may be

prescribed

207

8. Motor Spirit dealer As prescribed As may beprescribed

As may beprescribed

208


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AUDIT

Audit by Chartered Accountant :

Every Registered dealer whose turnover of sales orpurchases exceed Rs. 40,00,000/- has to get his accountsaudited by a Chartered Accountant.

The dealer has to furnish Audit Report to the Departmentwith following documents within eight months form the endof the year to which the report relates.

1)Profit & Loss Account and Balance Sheet with detailedschedule of Fixed Assets.

2) Reconciliation of sales and purchase figures shown in theReturns with the figures shown in Profit & Loss Accountand Balance Sheet.

3) Proof of payment i. e. tax paid challans

4) Information regarding credit purchases

5) statement of set-off claimed in the prescribed form.


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AUDIT

6) Contravention statement of CST purchase like goodsnot included in RC, goods not utilised for intendedpurpose, statement of missing forms such as C, E-I, E-II,H, F etc.

7) Details of URD purchases, where purchases madefrom a dealer exceeding Rs. 10,000/-

8) The auditor will verify the following details from books

accounts with the returns filed and submit the AuditReport with his observations.

a) Turnover of sales and purchases including CST

b) Computation of Set-off claimed

c) Computation of CST payable with description of goods

and Schedule and Entry.d) Branch transfers with respect trading and

manufactured goods etc.

Failure to submit Audit report in time will attract penaltyequal to 1/10% of the total sale or Rs. 1,00,000/-

whichever is less.


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AUDIT

Audit by Department :

1) In addition to C. A. Audit, the Department may also

arrange for audit of business of any dealer.

2) Department can carry out audit in respect of any period

3) During the course of audit the Commissioner may require

the dealer to

a) Afford the necessary facility to produce books of

accounts and other documents or verify stock and cash.

b) Furnish any information as may be required for ensuringcompliance.

4) The Officer conducting audit is prohibited from removing

any books of accounts.


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ASSESSMENT

There is no provision for annual assessment in MVATAct.

Where a registered dealer fails to file a return inrespect of any period by the prescribed date, theCommissioner may carry out Best Judgmentassessment.

Where Commissioner considers it necessary to ensurethe correctness of the return filed, shall assess thereturn of any period by calling anyinformation/documents from the dealer.

Where the Commissioner has reason to believe that adealer liable to pay tax has not applied for registrationand paid tax, can pass Best a Judgment assessmentorder.


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SET OFF

General conditions for granting Set-Off

Set-Off can be claimed only on production of original TaxInvoice.

The dealer has to preserve and produce the original Tax Invoicefor claim of Set-Off when demanded by the Authority.

No Set-Off can be claimed unless the dealer has maintained

purchase register in chronological order as prescribed underRules.

Set-Off amount can be adjusted against tax payable underMVAT and CST Act. Balance if any can be carried forward tosubsequent period in the same year.

Set-Off remaining un-adjusted at the end of the year will berefunded.

Set-Off of tax paid on trading goods purchased before appointedday and held in stock as on 31.03.2005 can be claimedimmediately after the appointed day.


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SET OFF ON GOODS HELD IN STOCK AS ON

31.03.2005

1) Set-Off is available of tax paid on

a) Purchases of Trading Goods and Capital Assets for resaleunder Bombay Sales Tax Act

b) Purchases of goods under Motor Spirit Act

c) Purchases of goods under Works Contract Act

d) Purchases of goods under Lease Act

e) Entry of Motor Vehicles under Entry of Motor Vehicles Act

f) Entry of Goods under Maharashtra Tax on Entry of Goods

in to Local Area Act.

2) Set-Off for purchases effected under Bombay Sales Tax Act

is available for

a) Sales Tax paid separatelyb) Sales Tax included in purchase price

c) Purchase Tax paid

3) Set-Off on opening stock will be granted during the year

2005-06 in the month of April itself.


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SET OFF ON GOODS HELD IN STOCK AS ON

01.04.2005

4) No Set-Off is available

a) For turnover tax, Surcharge and Resale Taxb) If stock statement as required, is not submitted

c) If Set-Off is already claimed under the earlier law

d) Unless goods are resold after 01.04.2005 and before

31.12.2005

e) On Capital Assets purchased prior to 31.03.2003

5) Set-Off on capital goods can be claimed only if they are

resold and in the month in which they are resold.

6) Stock statement for opening stock of trading goods for

claiming set-off has to be submitted before 30.04.2005 in

the prescribed form.

7) Set-Off of Purchase Tax paid for contravention of Form

N-14, 14-A and 14-I can be claimed only in the month of

contravention declared and P/T paid there on but before

31.12.2005.


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SET OFF ON PURCHASES MADE AFTER 31.03.2005

Full Set-Off is available on the following goods :

No. NATURE OF INPUT CONDITIONS IF ANY

1. Capital Assets Set-Off not available on Office

Equipments, Furniture, Fixture

and Electrical Installations.

2. Motor Vehicles Set-Off available only if used as

goods vehicles and for Motor

Vehicle dealers or Lease tax

paid on Motor Vehicles.

3. Raw Material N. A.

4. Parts N. A.

5. Components N. A.

6. Spares N. A.

7. Packing Materials If used in packing of Taxable

Goods or resold.


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No. NATURE OF INPUT CONDITIONS IF ANY

8. Other purchase debited

to P&L A/C

If receipts on account of sale of

goods is more than 50% of the

total receipts.

9. Trading Goods N. A.

10. Motor Spirit If only resold or stock

transferred.

11. Incorporeal or Intangiblegoods

Viz. Import License, Exim Scrips,Duty Free Advance License,

Export Permit / License / Quota ,

DEPB and Software for Software

dealers.

12. Tax paid under

Maharashtra Tax on

Entry of Motor Vehicles

Full Entry Tax Paid

13. Tax paid under Entry of

any Goods in to Local

Area

Full Entry Tax paid


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Set-Off at reduced rate is available on following goods:

Sr. No. Description of goods Extent of Reduction

1. Taxable goods used as Fuel 4% of PP

2. Taxable Goods used in manufacture of

Tax Free goods.

4% of PP

3. Packing Material used for sale of Tax

Free goods

4% of PP

4. Taxable goods used in manufacture of

Goods for Branch Transfer.

4% of PP

5. Input used in execution of WorksContract under Composition option

36 % of Input Tax paidon Local Procurement

6. Liquor Vendors holding License in

Form FLII/CLIII where SP is less than

MRP

Set-Off available at

the ratio = SP/MRP


38/43

NON ADMISSIBILITY OF SET OFF

No Set-Off /

Input Tax under VAT is admissible on

1. Purchase of Motor Vehicles (other than Goods Vehicles)and parts, components and accessories thereof.

2. Purchase of Motor Spirits unless they are resold.

3. Purchase of Capital Assets or consumables by job

worker not engaged in business of manufacture.

4. Purchases effected by 100% EOU, SEZ Units, PSIU

and100% EOU as these dealers are eligible for refund of

tax paid on input.

5. Purchases effected by way of woks contract where the

contract is for erection of immovable property

6. Purchases of building material which are not resold but

are used in the activity of construction.


39/43

NON ADMISSIBILITY OF SET OFF

7. Purchases of Drugs/Medicine effected by Whole Seller

8. Crude Oil used by Oil Refineries for Refining

9. Purchases effected by Shipping Company

10. Purchases of incorporeal or intangible goods like

a) Trade Marks

b) Patents

c) Copy Rights etc.

11. Following purchases meant for own consumption:

a) Office Equipments

b) Furniturec) Fixture

d) Electrical installations.

12. Purchases of goods debited to P&L Account, if out of

gross receipts of a dealer, the receipts on account of sale of

goods are less than 50% of the total receipts.


40/43

TAX DEDUCTED AT SOURCE

TDS is applicable on amount paid to works contractor

(other than transactions covered under CST Act).

Dealer requires to deduct TDS has to obtain Sales TaxDeduction Account Number from the department bymaking application in Form-401.

TDS should not be deducted from tax amount shownseparately.

TDS is required to be deducted form advance paid to acontractor if the same is to be adjusted towardspurchase price payable to him.

The principal contractor should not deduct TDS frompayment made to his sub-contractor.


41/43


TDS due and deductible has to be remitted to the

Government with in 10 days from the expiry of the month,irrespective of the actual amount of tax deducted.

A Contractor can apply to the Commissioner for a

certificate, stating therein that the TDS should be

deducted only on part of the amount or not to be

deducted at all.

The employer has to deduct the tax in above case either

on part of the amount or not to deduct at all in

accordance with the certificate issued by the

Commissioner.

Employer deducting tax has to furnish TDS certificate in

Form-402 to the contractor immediately after deduction.


42/43


The Employer issuing TDS certificates ha to maintaindetails thereof in Form 404

The Employer also has to file Annual Return in Form 405with theJoint Commissioner of Sales Tax within three months from theend of the year.

The employer has to deposit within 10 days in Form 210& file astatement in duplicate in the prescribed form within 20 daysfrom end of the relevant Quarter for which the TDS is deducted,to the Assessing Authority of the contractor.

TDS may be required to be deducted only if the payment madeto Contractor exceeds Rs. 5 Lakhs during a year.

The rate of TDS is 2% for a registered Contractor and 4% in casepayment made to unregistered Contractor.

The Employer has to apply for WCT TAN within 30 days ofeffecting TDS.


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MAH-VAT Presentation.ppt

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