Vat is a Modern and Progressive Form if Sales Tax

7/23/2019 Vat is a Modern and Progressive Form if Sales Tax

1/18

RELIABLE COMMERCE CLASSES T.Y.B.COMINDIRECT TAXES

Vat is a modern and progressive orm i sa!es ta".it is #$arged and #o!!e#ted %& dea!erson pri#e paid %& t$e #'stomer . Vat paid %& dea!ers on t$eir p'r#$ases is 's'a!!&avai!a%!e or set(o) against Vat #o!!e#ted on sa!es.Advantages of Vat

A* It is simp!e+ progressive and transparent.B* Remar,a%!e rise in ta" reven'e or t$e government.C* Red'#tion in n'm%er o ta" rates.D* -niorm rates o Vat a!! over t$e e#onom&.E* It $as 'ni'e s&stem o giving ta" #redits or set(o) /$i#$ is riend!& or a ta"

pa&er.It $e!ps %etter ta" #omp!ian#e %& t$e dea!ers.0* No 1ta" on ta"2 or do'%!e ta"ation.3* More re!ian#e on se! assessment and vo!'ntar& #omp!ian#e %& dea!ers.4* T$e rate o VAT on e"port is 5ero and &et #redit is given on ta" paid on inp'ts.T$is

/i!! en#o'rage e"port promotion and /i!! improve t$e %a!an#e o pa&ments o t$e#o'ntr&.VAT app!ies to a!! t&pes o %'siness in#!'ding 6

a* Importers %* man'a#t'ring #* Distri%'tors d* 7$o!esa!erse* Retai!ers * /or,s #ontra#tors.

How is VAT charged?A!! registered dea!ers m'st #$arge VAT on t$eir sa!e o ta"a%!e goods and #o!!e#t itrom #'stomers.T$e& m'st iss'e a ta" invoi#e to ot$er registered dea!ers s$o/ingt$e VAT amo'nt %eing #$arged as a separate amo'nt.Registered dea!ers /$o pa& VAT on t$eir p'r#$ases #!aim a 1set(o)28or deduction9or t$e VAT paid to t$eir s'pp!iers.Dea!er m'st see t$at t$e ta" is #$argedseparate!& in t$eir p'r#$ase invoi#e to #!aim set(o).Rate of VAT :-T$e& #an %e #!assi:ed into o'r #ategories+ 'nder ea#$ o /$i#$ adi)erent rate is des#ri%e(1. As man& as ;< items are e"empt rom VAT.T$ese are nat'ra! and 'npro#essed

prod'#ts in t$e 'norgani5ed se#tor and t$e& $ave so#ia!imp!i#ations+e.g.oodgrains+p'!ses+mi!,+vegeta%!es+ %oo,s et#.

2. Spe#ia! rate o => VAT is app!i#a%!e to go!d+si!ver+ornaments+pre#io's meta!s andstones.

3. Rate o ;> VAT is app!i#a%!e to a%o't ?@ items.T$e& are items o %asi#ne#essities s'#$ as dr'gs and medi#ines.a!! agri#'!t're and ind'stria!inp'ts+#apita! goods and de#!ared goods.

4. T$e genera! rate o =?.> VAT is app!i#a%!e to a!! t$e remaining #ommodities.T$e on!& e"#eption to t$ese rates is or t$e sa!e o motor spirits8i.e.petro!+diese!et#.9/$i#$ $ave spe#ia! rates %ased on t$e e"isting BOM%a& sa!es o Motor Spirit

Ta"ation A#t+=+ s'%e#t to a Foor rate o ?>.

?> or !i'or

et o!"#n$ut Ta% creditG( Inp't ta" #redit means set o) or ded'#tion o inp't ta"%& a registered dea!er against t$e amo'nt o $is o'tp't ta".&g.

'ateria(u$$(ier SH =VAT

)

Man'a#t'rerSH =VAT =>J=

)

*ho(esa(er SH =VAT =>J=

)

Retai(erSH ?VAT =>J?

=


2/18


=>J= B't VATpa&a%!e=(=J

B't VAT pa&a%!e=(= JK

B-T VAT pa&a%!e?(= J?

#nco+e Ta% VAT=. It is a dire#t ta"?. It is #ontro!!ed %& Centra! 3overnmentK. It arises on re#eipt or a##r'a! o

in#ome.;. It is #$arged on in#ome arising in India

or even o'tside India.. It is !evied on a person.


3/18


i* C'stoms department o t$e 3overnment o Indiaii* Departments o -nion 3overnment and State 3overnment.iii* In#orporated or 'nin#orporated so#ieties+ #!'%s et#.iv* Ins'ran#e and :nan#ia! #orporations+ Ban,s et#

v* Lo#a! a't$oritiesvi* Ma$aras$tra state Road Transport #orporationvii* Hort Tr'st.viii* H'%!i# C$arita%!e Tr'stsi"* S$ipping and #onstr'#tion #ompanies+ air!ines+ advertisement agen#ies+

air transport #ompanies."* An& ot$er #orporation+ #ompan&+ %od& or a't$orit& 'nder t$e #ontro! o

t$e 3overnment or !o#a! a't$orit&.&%ce$tions :i* An agri#'!t're /$o se!!s agri#'!t're prod'#e gro/n on !and #'!tivated

%& $im.ii* An ed'#ationa! instit'tion #arr&ing on t$e a#tivit& o %'&ing and se!!ing

goods.in t$e perorman#e o its 'n#tions.iii* A transporter $o!ding permit or transport ve$i#!es i.e. $irer.

K* #+$orter ec.2/130: Importer means a dea!er /$o %rings an& goods into t$e state rom an& p!a#eo'tside t$e state. On!& a dea!er #an %e an importer. 4e ma& %ring goods inMa$aras$tra %& /a& o p'r#$ase or ot$er/ise. T$e& ma& %e %ro'g$t %& an& Meansi.e. %& road+ rai!+ aerop!ane+ #o'rier+ post et#.

;* 'anufacture ec.2/10: Man'a#t're in#!'des prod'#ing+ ma,ing+ e"tra#ting+ a!tering+ ornamenting+:nis$ing or ot$er/ise pro#essing+ treating or adapting an& goods.

Man'a#t're imp!ies a #$ange %'t ever& #$ange is not man'a#t're. T$e pro#essm'st %e s'#$ t$at t$e :na! goods are #ommer#ia!!& di)erent rom t$e origina!goods.

T$e o!!o/ing tests #an %e app!ied+ as !aid do/n %& vario's #o'rts 6A9 t$ere s$o'!d %e some pro#ess on goods.B9 S'#$ pro#ess ma& %e #arried o't %& t$e dea!er or an& t$ird person $ired %& t$edea!er.C9 S'#$ pro#ess m'st %ring a%o't #$anges in t$e s'%stan#e o t$e origina! goods.D9 T$e C$anges m'st res'!t ito a #ommer#ia!!& ne/ nad di)erent arti#!e.r.

o

A#tivit& Is it

man'a#t'r

e

Reason

=.

?.

K.

;.

Assem%!& o C!e or T.V.

Ho!is$ing o 0'rnit'rego!d

ornaments.

Repairingre#onditioning o

ma#$ine

C'tting stee! s$eets into

sma!!er s$eets.

YES

NO

No

NO

A ne/ prod'#t /it$ di)erent

No ne/ prod'#t #omes into

e"isten#e

No ne/ prod'#t #omes into

e"isten#e

K


4/18


.


5/18


T$is de:nition $e!ps to :" t$e !ia%i!it& 'nder t$e A#t %e#a'se t$e ta" is#$arged on on!& t$ose a#tivities /$i#$ are #overed %& t$e de:nition o sa!e.On!& a sa!e /it$in Ma$aras$tra is ta"a%!e 'nder t$e A#t.

7o((owing are not sa(e as $er court decisions

A9 %ran#$ transer %9 se! #ons'mption #9 ree rep!a#ement d'ring /arrant&periodD9 distri%'tion as ree samp!es.tate whether fo((owing transactions are with reason a*

%*

#*

d*

e*

*

g*

$*

Transer o goods rom 4O to

%ran#$

H!edge o goods

3it given to #$arita%!e instit'tion

Sa!e o #ar

Sa!e o s#rap

Sa!e on $ire p'r#$ase %asis

Servi#e #$arges re#eivedE"#$ange o mo%i!e set

NO

NO

NO

YE

S

YE

S

YES

NO

YE

S

No transer o o/ners$ip

E"#!'ded in de:nition

No #onsideration

Transer o o/ners$ip or

#onsideration.

Transer o o/ners$ip or

#onsideration.

Spe#i:#a!!& in#!'ded.No goods invo!ved.

3oods given or #onsideration.

@9 a(e 8rice sec.2/20 : Sa!e pri#e means t$e amo'nt o #onsideration paid or pa&a%!e to a dea!er or an&sa!e made. In#!'ding an& s'm #$arged or an&t$ing done %& t$e se!!er in respe#t ot$e goods at t$e time o or %eore de!iver& o t$e goods.7o((owing $oints are i+$ortant-

=. T$e amo'nt o d'ties !evied on goods 'nder Centra! E"#ise A#t+ =;; or t$e#'stoms A#t. =


6/18


Tota( a(e 8rice 9e.g A prod'#t is so!d at Rs.= per 'nit. In a #ase+ ? 'nits are so!d. T$e o#troi isat Rs.? per 'nit and e"#ise is at Rs.= per 'nit. T$e pa#,ing and or/ardinge"penses are Rs.. #a!#'!ate sa!e pri#e.

o+$utation of a(e 8riceConsideration

* O#troi 8? 'nits ?9

* E"#ise 8? 'nits =9

* Re!ated pa#,ing e"penses

Sa!e pri#e

?+

;

?+

??+

MVAT /i!! %e #$arged on t$is sa!e pri#e o Rs.??+.8and not on Rs.?+9

9 8urchase 8rice ec.2/2;0:H'r#$ase pri#e means t$e amo'nt o #onsideration paid or pa&a%!e to a dea!er oran& p'r#$ases made+ in#!'ding an& a'm #$arged or an&t$ing done %& $t ese!!er inrespe#t o t$e goods+ at t$e time o+ or %eore de!iver& o t$e goods.7o((owing $oints are i+$ortant

=. T$e amo'nt o d'ties !evied on goods 'nder #entra! e"#ise A#t.=;; or t$eC'stoms A#t+=


7/18


Ever& dea!er+ /$o satis:es t$e #onditions given 'nder t$e A#t+ is !ia%!e to pa& ta"+/it$ e)e#t rom t$e same da&.4is registration is #omp's!ar& rom t$e same da&.0o!!o/ing points are important 6

=. Ever& dea!er+ /$ose tota! t'rnover o sa!e or p'r#$ases e"#eeds r'pees 7ive(ah@or an importer /$ose tota! t'rnover o sa!e or p'r#$ases e"#eedsr'pees one !a,$+ is !ia%!e to pa& ta" /it$ e)e#t rom t$e da&+ in a##ordan#e/it$ t$e provisions o t$is A#t.

?. A dea!er /$o e"#eedt$e re!evant !imits+ %e !ia%!e to pa& ta" 'nder t$isA#t/it$ e)e#t rom t$e =stda& o Apri! o t$e respe#tive &ear. 4o/ever no ta"is pa&a%!e on sa!e rom =; 'pto t$e date on /$i#$ !imit is e"#eeded.

K. 0or t$e p'rpose o t$is se#tion+ t$e !imits o t'rnover are as o!!o/s 6=. Importer Tota! t'rnover o sa!e

e"#eeds Rs.=++

Tota! Ta"a%!e sa!e or Lo#a!

Ta"a%!e p'r#$ase e"#eeds

Rs.=+.?. An& ot$er

person

Tota! T'rnover o sa!e

e"#eeds Rs.++

Tota! Ta"a%!e sa!e or Lo#a!

Ta"a%!e p'r#$ase e"#eeds

Rs.=+

;. A dea!er #+$orter or anB other $erson/$o e"#eeds t$e !imits and'!:!!s %ot$ t$e #onditions

D'ring t$e &ear #ommen#ing rom =stApri!+ is !ia%!e to pa& ta" /it$ e)e#trom t$e date on /$i#$

4e e"#eeds !imits or t$e :rst time. 4e $as to ma,e an app!i#ation to t$eRegistration A't$orit& in

T$e pres#ri%ed orm /it$in K da&s rom t$e date t$e re!evant !imitse"#eeds. A Spe#i:#

Registration No. is a!!otted to $im. 4e /i!! %e ,no/n as 1Registered Dea!er2'nder t$is A#t.. T$e period rom =stApri! to t$e re!evant date on /$i#$ $e e"#eede t$e

spe#i:ed !imit s$a!! %e #a!!ed as+-RD period i.e. period d'ring /$i#$ t$edea!er /as 'nregistered.


8/18


K. MVAT G CALC-LTAION O0 TAXLIABLITY

AND SET(O00

Ever& dea!er /$o is !ia%!e to pa& ta" 'nder t$is A#t+ m'st pa& it in a##ordan#e /it$t$e provisions o t$is A#t.0or t$e p'rpose o ta"+ a!! goods are divided in di)erent s#$ed'!es /$i#$ are givenas 'nder(chedu

(e

8articu(ars Rate of Ta%

A Essentia! #ommodities s'#$ as mi!,+ %read+ %oo,s+

potato et#.

NIL

B 3o!d+ Si!ver+ Hear!s+ pre#io's stones =>C De#!ared goods+ ind'stria! inp'ts and ot$er spe#i:#

goods.

;>

D

A9 0oreign !i'or+ Co'ntr& !i'or

B9 Motor Spirit+ petro!+ dise!

?>

Rate

spe#i:edE A!! ot$er goods 8not in S#$. A to D9 =?.>

ertain a(es and $urchase not (iaC(e to Ta% sec.:

Se#tion dea!s /it$ sit'ation /$erein sa!e or p'r#$ase /$i#$ are not !ia%!e orTa". -nder Ma$aras$tra VAT+ ??. T$e& are given as 'nder 6A9 Sa!e or p'r#$ases o'tside t$e state 8's ; o T$e Centra! Sa!es Ta" A#t9B9 in t$e #o'rse o import o goods in india 8's o T$e Centra! Sa!es Ta" A#t9C9 In t$e #o'rse o e"port o goods o'tside India 8's o t$e Centra! Sa!es Ta"A#t9D9 In t$e #o'rse o inter(state trade or #ommer#e.E9 Sa!e o Air(Crat 'e!.

09 Sa!e o goods %& an E"port oriented -nit8EO-9 or %& an 'nit in Spe#ia!E#onomi# 5one8SEU9 or %& an 'nit in E!e#troni# 4ard/are Te#$no!og& Har,s'%e#t to t$e terms and #onditions as ma& %e pres#ri%ed.39 T$e state government ma& provide e"emption rom pa&ment o ta" inrespe#t o an& #!ass or #!asses o sa!e o goods as a spe#ia! in#entive.

o+$osition of Ta% ec.42G


9/18


Composition s#$emes are simp!e s#$emes providing simp!e pro#ed're o ta"or t$e %ene:t o sma!! dea!ers. It invo!ves pa&ment o ta" amo'nt in!'mps'm. It is an optiona! s#$eme or #ertain spe#i:# dea!ers.7o((owing c(asses of dea(er can o$t for the sche+e

=. A retai!er?. A dea!er r'nning an eating $o'se+ $ote!+ resta'rant+ or a #aterer /$oserves ood and non 6a!#o$o!i# drin,s

K. A /or,s #ontra#tor8Rate o ta" at >9;. A dea!er o r'nning %a,eries and se#ond $and motor ve$i#!es.. A dea!er invo!ved in t$e e"e#'tion o #onstr'#tion #ontra#t8Rate o ta" at

>990or t$e p'rpose o t$is se#tion+ a retai!er $as %een de:ned as a dea!er i=t$or > o $is t'rnover o sa!e is made to persons /$o are notdea!ers i.e. :na! #ons'mers.

However@ the fo((owing dea(ers cannot o$t for the sche+e ofco+$osition =. A Man'a#t'rer ?. An importerK. A dea!er /$o p'r#$ase an& goods rom E"empt -nits i.e. interstate sa!e

or e"port sa!e or sa!e o'tside t$e state.;. A dea!er dea!ing in !i'or.

et-o! @Refund sec.4:Set(o) means red'#tion o ta" paid on p'r#$ases rom ta" pa&a%!e onsa!e.set(o) is t$e main eat're o VAT. Re'nd means ret'rn o e"#ess ta" paid%& a dea!er.Set(o) or re'nd #an %e #!aimed in respe#t o ta"es paid 'nder ear!ier !a/ andin respe#t or MVAT paid ater =;. It is a!!o/ed on!& to a registered dea!er.

0'rt$er+ s'#$ dea!er m'st %e !ia%!e to pa& ta" 'nder MVAT. Centra! sa!es Ta"8CST9 on p'r#$ases rom o'tside Ma$aras$tra are not e!igi%!e or set(o).

et-o! on or After 1"4"2;;1. Ru(e 2 :On!& a registered dea!er #an #!aim set(o) on p'r#$ases rom registereddea!er on or ater =;?. Set(o) #an %e #!aim o sa!es ta" on(a* H'r#$ases o #apita! assets %* trading goods #*ra/ materia!s and

spare partsd* Ha#,ing materia!s e* 'e!.

Do'%!e set o) s$a!! not %e granted 'nder t$is !a/.

Reduction in et-o! ru(e 3:T$e set(o) avai!a%!e 'nder an& r'!es s$a!! %e red'#ed or disa!!o/ed in part orin '!! 'nder o!!o/ing sit'ations(

=. K> o t$e p'r#$ase pri#e o ta"a%!e goods 'sed as 'e!.?. I t$e dea!er man'a#t're an& ta" ree goods8goods in s#$ed'!e A/it$ Ni!

rate o ta"9+t$en an amo'nt e'a! to ?> o t$e p'r#$ase ri#e o#orresponding ta"a%!e goods p'r#$ased %& $im s$a!! %e red'#ed rom t$eamo'nt o set(o)+ $o/ever+ it is not app!i#a%!e to p'r#$ases o #apita!assets or 'sed as 'e!.

K. ?> o pa#,ing materia! 'sed in resa!e o Ta" ree goods.


10/18


;. ?> o sto#, transer o ta"a%!e goods o'tside state+ to its %ran#$ oragent8not %eing a sa!e.9

. => o sto#, transer o s#$.B goods to %ran#$ o'tside t$e state.8Hre#io'smeta!s9 i it is %ran#$ transerred+ t$e dea!er $as to orgo set(o) at => o

p'r#$ase pri#e o go!d 'sed.


11/18


F.1 a* 'r. G /$o is a dea!er Importer* $as p'r#$ased d'ring t$e :nan#ia! &earta"a%!e goods /ort$ Rs.K


12/18


'onth ,etai(s of 8urchases etc. ,etai(s of sa(es

Ta%

7ree

5oods

Ta%aC(e

5oods

Raw 'ateria( J

'fg. &%$./$rod.0

Ta%

free

5oods

Ta%aC(

e

5oodsApri! to

Nov.?=

De#.=

an.==

0e%.==

Mar#$+==

;+

ut of

'aharashtra

*ithin 'aharashtra

=.;.=

?.;.=

?.;.=

?.;.=

K.;.=

..=

..=

K+

(

(

;+

(

(

K+

(

(


13/18


?..=

K=..=

(

(

?+

(

(

;+

F. 'r. Ke(e#ommen#ed $is %'siness on =st0e%r'ar&+ ?=.0ind o't rom /$i#$

mont$ $e /i!! !ia%!e or Registration and to pa& ta" as per t$e provisions o MVATA#t+??. 3ive Reasons o &o'r ans/er.T$e detai!s o $is sa!es Z H'r#$ases are as'nder G

ear J 'onth 8urchases /Koca(0 a(es /Koca(0

Ta%aC(e

5oods Rs.

Ta% 7ree 5oods

Rs.

Ta%aC(e

5oods Rs.

Ta% 7ree

5oods Rs.0e%.+ ?=

Mar.+?=

Apri!.+?=

Ma&.+?=

'ne.+?=

'!&.+?=A'g.+?=

Sept.+?=

+

K+

;+

+

?+

;+;+


14/18


A$ri(

'aB

Mune

Mu(B

August

+

;+

K+

CST =++;. Sa!e o s#$ed'!e E goods =++

Comp'te t$e Vat !ia%i!it& or t$e mont$ o De#.+?=F.2 'r. A registered dea!er gives &o' inormation on sa!es as detai!ed %e!o/ G8eriod >.'. Ta%aC(e sa(e /et0'arter ending 'n.+?=

'arter ending sept.+?=

'arter ending De#.+?=

an'ar& ?==

0e%r'ar& ?==

Mar#$ ?==

=K++


15/18


S#$ed'!e 1D2 goods ?>

S#$ed'!e 1E2goods


16/18


?. Sa!es o s#$ed'!e B goods =++K. Sa!es o s#$ed'!e C goods man'a#t'red* ?=+


17/18


;> VAT goods

=?.> Vat 3oods

VAT E"empt 3oods

Tota!

=+;+

++

?++

;+

=++

(

=++

++

?++?=+;+ =+;+ ?++

/C0T$e inp't ta" paid on p'r#$ase o goods is e!igi%!e or VAT #redit set(o)*./c0 Sa!es made %& t$e dea!er d'ring t$e mont$ are as %e!o/GHarti#'!ars 3ross amo'nt O'tp't ta" #o!!e#ted Net sa!e pri#e;> VAT 3oods

=?.> Vat 3oods

VAT e"empt 3oods

Tota!

==+;;+

=+=?+

?++

;;+

=+=?+

(

==++

++

?++?;+


18/18


S#$.ES#$.A S#$.C S#$.E

O#t.?=

Nov.?=

De#.?=

=++

?++

?++

;++

;+?+

Date post:	17-Feb-2018
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Vat is a Modern and Progressive Form if Sales Tax

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