VALUE ADDED TAX (TNVAT)

Presented by B.Ganesh Prabhu

Brush up of VATTax

on the value added

Consumption Tax

No cascading

, hence beneficial

Easy to admini

ster

Types of Sale in VAT

Local Sale - Sales made within the State at different VAT Rate as per the rate mentioned First Schedule.

CST Sale - Sales made outside the State at different rate as per provisions of CST.

Zero Rated Sale – Sales made to SEZ and UN. High Sea Sale – Goods are to be imported before

which the transfer of document to title is handed over.

Export – Sale of Goods to Foreign Country & Penultimate Sale.

Compounding Scheme Works contract (2% or 5%)

Hotel, Restaurant and sweet stalls (Turnover lesser than Rs. 50 Lacs)

Purchase – within state, Sale – within state – ½% (Turnover lesser than 50 Lacs)

VAT Audit – An Overview How? – Vouching the sales and purchases

ledger to check the tax rates and confirm liability.

When? – Before 9 months from the completion of the Financial Year

VAT Audit – U/s.63A of TNVAT Why? - If total turnover of the assesse

exceeds Rs. 1 Crore in a year.

Who? – By a Accountant (CMA/CA)

What? – A report submitted mentioning the total sales and purchases along with the taxes paid at various rates, in prescribed format.

Audit Procedure

• Recording of Transactions

• Payment of VAT Liability

Books of Accounts

• Disclosure of Purchases and Sales

• Disclosure of VAT Liability and Payment

Return

• Verification of Books

• Verification of Return

• Reporting

VAT Audit Format

Annexure Disclosure Annex I

Annex IA

Annex II Annex III Annex IV Annex V Form J Form K

All types of purchases Inter state purchases and

transfers All types of Sales Reversal of ITC Import and Export Excess of ITC to be carried forward Ineligible ITC Details Small Dealers (10 Lakhs- 50

Lakhs) and no interstate transactions

Form WW – a Doorstep

Name

TIN

AddressNature of business

Preparing the Report PART A – Details of books of accounts

maintained and verified PART B – Turnover, Purchase, ITC

Reversal, Inter state sales, Input on capital goods, Delay in filing if any, Stock details and ratio analysis are to be disclosed.

Part A + Part B = What you audit !!

In a Crux

Reconciliation of Purchase & Sales

Computation of VAT & CST Liability

ITC Reversal

Payment of VAT & CST

Filing of Return

As a VAT Auditor Match the payable with the actual

payments Check the various rates of taxes applied Verify the returns/forms filed Disclose the Audit done in Form WW Preserve such workings

Beware of these! Improper disclosures in Forms Rate difference Wrong classifications Delayed or Non –Filing

Points to Ponder?1) Reversal of Input Tax Credit on CST Sale – With Form C or Without Form C?

2) Reversal of Input Tax Credit on Stock Transfer?

3) Periodicity of Reversal Quarterly or Monthly?

4) ITC Reversal on Exempted Sale?

5) Sale of Goods to 100%EOU – Outside the State?

Points to Ponder?6) Sale of Goods less than Purchase Price?

7) Construction Company – Method of Valuation?

8) ITC to be reversed on Free Issues?

9) Zero Rated Sale Vs Exempted Goods?

10) Purchase of Goods from URD?

Doubts / Questions ?

17

B.Ganesh PrabhuMobile: +91 98404 71139E- Mail : ganeshprabhu.b@gmail.com

Thank You…