PRO1ECT REPORT

ON
PRO1ECT REPORT ON MAHARASHTRA VALUE ADDED TAX(MVAT)
MASTER OF COMMERCE PART II
IN
TAXATION- INDIRECT TAX
SEMESTER IV
th
2013-2014
IN PARTIAL FULFILLMENT OF RECRUITMENT MASTER OF COMMERCE
SUBMITTED:
BY
PRATEEK KUMAR UDAYRA1 UPADHYAY
UNDER THE GUIDANCE OF
PROF. MAHESH
S.M.SHETTY COLLEGE OF SCIENCE, COMMERCE & MANAGEMENT
STUDIES
ADD: - OPP. 1ALVAYU VIHAR
HIRANANDANI GARDEN
POWAI
Address: Opp. Jalvayu Vihar, Hiranandani Garden, Powai, Mumbai - 400076
Web site: hp!""#m#heyin#iue.or$ Telephone: %&'-(()
6'*(7*('
Email id: +olle$e,#m#heyin#iue.in Telefax: %&'-(() 6'*(7*04
EVALUATION CERTIFICATE
-hi# i# o +eri.y ha he under#i$ned have a##e##ed and evaluaed he pro/e+
on
0PRO1ECT REPORT ON RECRUITMENT AND SELECTION PROCESS OF TATA
DOCOMO1, #ubmied by PRATEEK KUMAR UDAYRA1 UPADHYAY #uden o.
M 2om par 3 44.
-hi# pro/e+ i# ori$inal o he be# o. our 5nowled$e and ha# been a++eped .or
inernal 6##e##men.
4nernal 78aminer 78ernal 78aminer Prin+ipal
Pro.. 9r. SHAUKAT ALI Dr. Sridhara
Shetty

Address: Opp. Jalvayu Vihar, Hiranandani Garden, Powai, Mumbai - 400076
Web site: hp!""#m#heyin#iue.or$ Telephone: %&'-(()
6'*(7*('
Email id: +olle$e,#m#heyin#iue.in Telefax: %&'-(() 6'*(7*04
DECLARATION BY THE STUDENT
4, PRATEEK KUMAR UDAYRA1 UPADHYAY, #uden o. M 2om Par 3
44 hereby de+lare ha he pro/e+ .or he paper :e#ear+h mehodolo$y, iled,
0PRO1ECT REPORT ON RECRUITMENT AND SELECTION PROCESS OF TATA
DOCOMO1 #ubmied by me .or #eme#er 34 durin$ he a+ademi+ year (0'* 3
(0'4, ba#ed on a+ual wor; +arried ou by me under he $uidan+e and
#upervi#ion o. PROF. DR. SHAUKAT ALI
4 .urher #ae ha hi# wor; i# ori$inal and no #ubmied anywhere el#e .or any
e8aminaion.

<i$naure!
%Praee; ;umar =dayra/
=padhyay)
ACKNOWLEDGMENT
I take this opportunity to thank all the person without whose constant
guidance, support and help, this project would not have been completion.

A Few type written words of thanks can-not really express the sincerity of
my gratitude. But I am still trying to put into words my gratefulness
towards all who have helped & encouraged me in carrying out this project.
This project would have been impossible without the help and valuable
inputs provided by my teachers throughout the project.
I hereby acknowledge my appreciation and my record of thanks to the
following people:
Our Principal Dr. Sridhara Shetty for his constant support and
motivation.
My Research methodology professor and guide DR. SHAUKAT ALI who
guided me throughout the project with her expertise and patience by
providing me with proper information regarding the project.
All in all, I would like to thank all the people who helped me by being there
for me as my support. Thank you once again.
CONTENT
Sr. No. Topics Covered Page No.
1 Section - I Introduction to Value Added Tax. 1 - 12
2 Section - II Value Added Tax in Maharashtra. 13
A. Introduction.
B. Registration under Value Added Tax.
C. Explaining Value Added Tax.
D. Calculating Tax Liability.
E. Filing of Return and Paying Tax.
F. Records and Accounts.
G. Business Audit.

14 - 16
17 - 21
22 - 27
28 - 36
37 - 44
45 - 48
49 - 51
3 Section - III Appendix. 67 - 69
4 Section - IV Conclusion. 70
5 Section - V Bibliography. 71
WHAT IS VALUE ADDED TAX?
Value 6dded -a8 i# a broad-ba#ed +ommodiy a8 ha i# levied a muliple #a$e# o.
produ+ion. -he +on+ep i# a;in o e8+i#e duy paid by he manu.a+urer who, in urn, +laim#
a +redi on inpu a8e# paid. 78+i#e duy i# on manu.a+ure, while V6- i# on #ale and boh
wor; in he #ame manner, a++ordin$ o he whie paper on V6- relea#ed by .inan+e mini#er
2hidambaram. -he do+umen wa# drawn up a.er all #ae#, barrin$ =P, were prepared o
implemen V6- .rom 6pril. 4 i# u#ually inended o be a a8 on +on#umpion, hen+e he
provi#ion o. a me+hani#m enablin$ produ+er# o o..#e he a8 hey have paid on heir inpu#
a$ain# ha +har$ed on heir #ale# o. $ood# and #ervi+e#. =nder V6- revenue i# +olle+ed
hrou$hou he produ+ion pro+e## wihou di#orin$ any produ+ion de+i#ion#.
WHY VAT IS PREFERRED OVER SALES TAX?
>hile heorei+ally he amoun o. revenue +olle+ed hrou$h V6- i# e?uivalen o #ale# a8
+olle+ion# a a #imilar rae, in pra+i+e V6- i# li;ely o $enerae more revenue .or
$overnmen han #ale# a8 #in+e i i# admini#ered on variou# #a$e# on he produ+ion 3
di#ribuion +hain. >ih #ale# a8, i. .inal #ale# are no +overed by he a8 #y#em e.$. due o
di..i+uly o. +overin$ all he reailer#, pari+ular +ommodiie# may no yield any a8.
However, wih V6- #ome revenue would have been +olle+ed hrou$h a8aion o. earlier
ran#a+ion#, even i. .inal reailer# evade he a8 ne.
-here i# al#o in-buil pre##ure .or +omplian+e and audiin$ under V6- #in+e i will be in he
inere# o. all who pay a8e# o en#ure ha heir eli$ibiliy .or a8 +redi# +an be
demon#raed. V6- i# al#o a .airer a8 han #ale# a8 a# i minimi@e# or eliminae# he
problem o. a8 +a#+adin$, whi+h o.en o++ur# wih #ale# a8. -he#e are .a+iliaed by he .a+
ha V6- operae# hrou$h a +redi #y#em #o ha a8 i# only applied on value added a ea+h
#a$e in he produ+ion 3 di#ribuion +hain. 6 ea+h inermediae #a$e +redi will be $iven
.or a8e# paid on pur+ha#e# o #e a$ain# a8e# due on #ale#. Only a +on#umpion #a$e
where here are no .urher ran#a+ion# will here be no a8 +redi#. Aa+; o. inpu +redi
.a+iliy in #ale# a8 o.en re#ul# in a8 on inpu# be+omin$ a +o# o bu#ine##e# whi+h are
o.en pa##ed on o +on#umer#. <ale# a8 i# o.en applied a$ain o he #ale# a8 elemen o. he
+o#, hu# here i# a problem o. a8 on a8. -hi# i# no he +a#e wih V6-, whi+h ma;e# i a
neural a8 a# i provide# he lea# di#urban+e o paern# o. produ+ion and he $eneraion
and u#e o. in+ome.
4n addiion, he audi rail ha e8i## under he V6- #y#em ma;e# i a more e..e+ive a8 in
admini#raion erm# han #ale# a8 a# i help# wih he veri.i+aion o. V6- amoun# de+lared
a# due. -hi# i# made po##ible by he .a+ ha one per#onB# oupu i# anoherB# inpu. 6# wih
#ale# a8 impor# are reaed he #ame way a# lo+al $ood# while e8por# are @ero- raed o
avoid ani-e8por bia#.
Cowih#andin$ he advana$e# menioned above, i i# worh noin$ ha V6- i# a
+on#iderably +omple8 a8 o admini#er +ompared wih #ale# a8. 4 may be di..i+ul o apply
o #mall +ompanie# due o di..i+ulie# o. re+ord ;eepin$ and i# +overa$e in a$ri+ulure and
he #ervi+e# #e+or may be limied. -o +over he hi$h admini#raion +o##, V6- rae# o. '0-
(0 per +en are $enerally re+ommended. -he e?uiy impa+ o. he relaively hi$h rae# have
been a +au#e .or +on+ern a# i i# po##ible ha he poor #pend relaively hi$h proporion# o.
heir in+ome# on $ood# #ub/e+ o V6-. -hu# he +on+ep o. @ero V6- rae on #ome iem#
ha# been inrodu+ed.
DIFFERENCE BETWEEN VAT AND CST
=nder he 2<- 6+, he a8 i# +olle+ed a one #a$e o. pur+ha#e or #ale o. $ood#. -here.ore,
he burden o. he .ull a8 bond i# borne by only one dealer, eiher he .ir# or he la# dealer.
However, under he V6- #y#em, he a8 burden would be #hared by all he dealer# .rom
.ir# o la#. -hen, #u+h a8 would be pa##ed upon he .inal +on#umer#.
=nder he 2<- 6+, he a8 i# levied a a #in$le poin. =nder he V6- #y#em, he reailer#
are no #ub/e+ o a8 e8+ep .or he reail a8.
=nder he 2<- 6+, $eneral and #pe+i.i+ e8empion# are $raned on +erain $ood# while
V6- doe# no permi #u+h e8empion#. =nder he 2<- law, +on+e##ional rae# are provided
on +erain a8e#. -he V6- re$ime will do away wih #u+h +on+e##ion# a# i would provide
he .ull +redi on he a8 ha ha# been paid earlier.
=nder V6- law, .ir#, he dealer pay# a8 on he #ale or pur+ha#e o. $ood#. -he #ub#e?uen
dealer pay# a8 on he porion o. he value added upon #u+h $ood#. -hu#, he a8 burden i#
#hared e?ually by he la# dealer. -o illu#rae he whole pro+edure o. V6-, an e8ample i# a#
.ollow#!
6 he .ir# poin o. #ale, he value o. $ood# i# :#.'00. -he a8 on hi# i# '(.DE. -here.ore,
he ne V6- would be '(.DE. 6 he #e+ond +han$e o. #ale, he #ale value i# :#.'(0 and he
a8 hereon i# 'DE. -he a8 ha i# o be paid a every poin i# 'DE. -he inpu a8 i# 'DE.
-he dealer will $e a +redi .or .ir# +han$e in #ale o. (.DE-- i.e. 'DE -'(.DE. -here.ore,
(.DE will be he ne rae. 6 he hird +han$e o. #ale, he #ale value i# :#.'D0 and he a8 on
hi# i# 'F.7DE. 6 he la# #a$e, he a8 paid i# 'F.7DE. -he 4npu -a8 i# 'F.7DE. 9ealerB#
$e a +redi .or #e+ond +han$e in #aleG i.e. 'F.7DE -'DE H *.7DE. -here.ore, *.7DE would
be he ne V6-. -hi# mean# ha V6- i# paid in he la# poin a8 under he #ale a8 re$ime.
WHO GAINS?
<ae and 2enral $overnmen# $ain in erm# o. revenue. V6- ha# in-buil in+enive# .or a8
+omplian+e I only by +olle+in$ a8e# and remiin$ hem o he $overnmen +an a #eller
+laim he o..#e ha i# due o him on hi# pur+ha#e#. 7veryone ha# an in+enive o buy only
.rom re$i#ered dealer# I pur+ha#e# .rom oher# will no provide he bene.i o. +redi .or he
a8e# paid a he ime o. pur+ha#e. -hi# ran#paren+y and in-buil in+enive .or +omplian+e
would in+rea#e revenue#. 4ndu#ry and rade $ain .rom ran#paren+y and redu+ed need o
inera+ wih he a8 per#onnel. Jor ho#e who have been +omplyin$ wih a8e#, V6- would
be a boon ha redu+e# he +o# o. he produ+ o he +on#umer and boo## +ompeiivene##.
V6- would be ma/or blow .or a8 evader#, boh manu.a+urer# who evade e8+i#e duy
paymen# and rader# who evade #ale#-a8.
WHAT`LL BE THE TAX BURDEN?
-he overall a8 burden will be raionali@ed a# iBll be #hared by all dealer#, and pri+e#, in
$eneral, will .all. Moreover, V6- will repla+e he e8i#in$ #y#em o. in#pe+ion by a #y#em
o. buil-in #el.-a##e##men by rader# and manu.a+urer#. -he a8 #ru+ure will be+ome
#imple and more ran#paren and a8 +omplian+e will improve #i$ni.i+anly. 4 will al#o be
#impler and o..er ea#y +ompuaion and ea#y +omplian+e. V6- will preven +a#+adin$ e..e+
hrou$h inpu rebae and help avoid di#orion# in rade and e+onomy by en#urin$ uni.orm
a8 rae#.
WHO PAYS?
6ll dealer# re$i#ered under V6- and all dealer# wih an annual urnover o. more han :# D
la;h will have o re$i#er. 9ealer# wih urnover# le## han :# D la;h may re$i#er
volunarily.
HOW TO PAY?
V6- will be paid alon$ wih monhly reurn#. 2redi will be $iven wihin he #ame monh
.or enire V6- paid wihin he #ae on pur+ha#e o. inpu# and $ood#. 2redi hu#
a++umulaed over any monh will be uili@ed o dedu+ .rom he a8 +olle+ed by he dealer
durin$ ha monh. 4. he a8 +redi e8+eed# he a8 +olle+ed durin$ a monh on #ale wihin
he #ae, he e8+e## +redi will be +arried .orward o he ne8 monh.
WHICH GOODS WILL BE TAXABLE UNDER VAT?
6ll $ood# e8+ep ho#e #pe+i.i+ally e8emp. 4n .a+, over DD0 iem# will be +overed under he
new a8 re$ime, o. whi+h 46 naural and unpro+e##ed lo+al produ+# would be e8emp .rom
V6-. 6bou (70 iem#, in+ludin$ dru$# and medi+ine#, all a$ri+ulural and indu#rial inpu#,
+apial $ood# and de+lared $ood# would ara+ 4E V6-. Ku, .ollowin$ oppo#iion .rom
#ome #ae#, i wa# de+ided ha #ae# would have opion o eiher levy 4E or oally e8emp
.ood $rain# .rom V6- bu i would be reviewed a.er one year. -hree iem# I #u$ar, e8ile,
oba++o I under addiional e8+i#e duie# will no be under V6- re$ime .or one year bu
e8i#in$ arran$emen would +oninue.
OTHER CONSIDERATIONS
4 i# imperaive ha poli+y ma;er# in +on#iderin$ adopion o. V6- #hould be inere#ed in
he e+onomy wide impa+ o. hi# a8. <pe+ial empha#i# i# o.en pla+ed on i# e..e+ on
e?uiy, pri+e# and e+onomi+ $rowh. -hi# i# pari+ularly imporan be+au#e o. he poenial
e..e+# on +on#umpion o. +erain +ommodiie# ha have a dire+ or indire+ e..e+ on labour
produ+iviy.
VAT EFFECT ON INFLATION
4n +on#iderin$ he inrodu+ion o. V6-, +ounrie# are o.en +on+erned ha i would +au#e an
in.laionary #piral. However here i# no eviden+e o #u$$e# ha hi# i# rue. 6 #urvey o.
O729 +ounrie# ha inrodu+ed V6- indi+aed ha V6- had lile or no e..e+ on pri+e#. 4n
+a#e# where here wa# an e..e+ i wa# a one ime e..e+ ha #imply #hi.ed he rend line o.
he +on#umer pri+e inde8 %2P4). -o $uard a$ain# any un.ore#een pri+e e..e+# he
auhoriie# may +on#ider a i$her moneary poli+y #an+e a he inrodu+ion o. V6-.
DISTRIBUTION EFFECTS OF VAT
Value added a8 i# widely +rii+i@ed a# bein$ re$re##ive wih re#pe+ o in+ome ha i# i#
burden .all# heavily on he poor han on he ri+h. -hi# emanae# .rom he .a+ ha
+on#umpion a# a #hare o. in+ome .all# a# in+ome ri#e#. Hen+e a uni.orm V6- rae .all#
heavily on he poor han he ri+h. -hi# +rii+i#m i# valid when V6- paymen# are e8pre##ed
a# a proporion o. +urren in+ome. However i., .ollowin$ he premi#e ha wel.are i#
demon#raed by he level o. +on#umpion raher han in+ome, +on#umpion i# u#ed a# he
denominaor he impa+ o. V6- would be proporional. 6 proporional burden would al#o
be demon#raed i. li.eime in+ome raher han +urren in+ome i# u#ed. 6 li.eime in+ome
+on+ep +on#ider# he .a+ ha many in+ome re+ipien# are only emporarily a lower in+ome
bra+;e# a# heir earnin$# in+rea#e. 4n order o addre## he re$re##iviy o. V6- he .ollowin$
mea#ure# +an be a;en!
L -he V6- i#el. +an be u#ed o di..ereniae a8aion o. +on#umer iem# ha are
+on#umed primarily by he poor #u+h ha hey pay le## or a @ero rae or o a8 lu8ury $ood#
a a hi$her han #andard rae.
L V6- e8empion# may al#o be $raned on $ood# and #ervi+e# ha are +on#umed
mo#ly by he poor.
L 7?uiy +on+ern# may al#o be addre##ed hrou$h oher way#, ou#ide he V6- #y#em,
#u+h a# oher a8 and #pendin$ in#rumen# o. $overnmen. -hi# +ould be in he .orm o.
lower ba#i+ in+ome a8 rae# on he poor or #ome pro-poor e8pendiure# o. $overnmen. -he
u#e o. muliple rae# o. V6- ha# however been widely di#+oura$ed .or variou# rea#on#.
-he#e in+lude!
L -he .a+ ha #omeime# i i# almo# impo##ible o di..ereniae beween hi$her
?ualiy e8pen#ive produ+# 3 e.$. .ood, +on#umed by he ri+h and ordinary produ+#
+on#umed by he poor. -hu# any +on+e##ion# e8ended may end o bene.i he ri+h mu+h
more han he poor.
L 4n+rea#ed +o## o. V6- admini#raion a# a di..ereniaed rae #ru+ure brin$#
wih i problem# o. delineain$ produ+# and inerprein$ he rule# on whi+h rae o u#e.
L #i$ni.i+anly in+rea#ed +o## o. a8 +omplian+e .or #mall .irm#, whi+h are u#ually
unable o ;eep #eparae re+ord#"a++oun# .or #ale# o. di..erenly a8ed iem#. -hi# re#ul#
in he u#e o. pre#umpive mehod# o. deerminin$ he a8 liabiliy, whi+h lead# o
more di..i+ulie# in moniorin$ he +omplian+e. -he hi$her +omplian+e +o# re#ulan .rom
di..ereniaion o. V6- rae# may al#o be re$re##ive wih re#pe+ o in+ome #in+e #maller
.irm# wih lower in+ome end o bear proporionaely more o. he burden han do lar$er
.irm#.
78empion# re.er o #iuaion# where oupu i# no a8ed bu a8e# paid on inpu# are no
re+overable. -he raionale behind e8empion# i# o redu+e ne$aive di#ribuional e..e+# o.
a8 hrou$h he e..e+ on in+ome#. -he e..e+# o. e8empion may be a# .ollow#!
L .allin$ o. revenue# 3 e8empion# brea; he V6- +hain. 4. e8empion# are $raned a
prior o he .inal #ale, i re#ul# in a lo## o. revenue #in+e value added a he .inal #a$e
e#+ape# a8.
L =n-re+overed a8aion o. #ome inermediae $ood# may lead o produ+er# #ub#iuin$
away .rom #u+h inpu# hu# di#orin$ he inpu +hoi+e# o. he #aid produ+er#.
L 78empion# may +reae in+enive# o 0#el. #upply1 i.e. a8 avoidan+e by veri+al
ine$raion.
L 78empion# end o .eed on ea+h oher $ivin$ ri#e o a phenomenon +alled
0e8empion +reep1. -hi# ari#e# .rom he .a+ ha ea+h e8empion $ive# ri#e o pre##ure# on
.urher e8empion. Jor e8ample +reain$ an e8empion o redu+e he a8 burden on a
pari+ular +ommodiy or $ood# may lead o in+rea#ed pre##ure .or e8empion or @ero rain$
o. inpu# u#ed .or he produ+ion o. #u+h a +ommodiy.
Ka#ed on he above, i i# imporan ha +are i# a;en when inrodu+in$ e8empion# in order
o avoid di#orion# in he produ+ion pro+e## a# well a# o minimi@e revenue lo## re#ulin$
.rom #u+h di#orion#.
Given he .a+ ha he primary purpo#e o. V6- i# o rai#e $overnmen revenue in an
e..i+ien manner and wih a# lile di#orion# o. e+onomi+ a+iviy a# po##ible, di#ribuion
e..e+# are perhap# beer addre##ed by oher .orm# o. a8 and $overnmen e8pendiure
poli+ie# whi+h +an o.en be beer ar$eed a he#e aim#.
VAT EFFECT ON ECONOMIC GROWTH
7+onomi+ $rowh +an be .a+iliaed hrou$h inve#men by boh $overnmen and he privae
#e+or. <avin$# by boh parie# are re?uired in order o .inan+e inve#men in a non-
in.laionary manner. 2ompared o oher broadly ba#ed a8e# #u+h a# in+ome a8 V6- i#
neural wih re#pe+ o +hoi+e# on wheher o +on#ume now or #ave .or .uure
+on#umpion. 6lhou$h V6- redu+e# he ab#olue reurn on #avin$ i doe# no redu+e he ne
rae o. reurn on #avin$. 4n+ome a8 redu+e# he ne rae o. reurn a# boh he amoun #aved
a# well a# he reurn on ha #avin$ are #ub/e+ o a8. 4n hi# re$ard V6- may be #aid o be a
#uperior a8 in promoin$ e+onomi+ $rowh han in+ome a8. <in+e V6- doe# no in.luen+e
inve#men de+i#ion# on .irm#, by in+rea#in$ heir +o##, i# e..e+# on inve#men +an be #aid
o be neural.
FEATURES OF VAT
'. :ae o. -a8 V6- propo#e# o impo#e wo ype# o. rae o. a8 mainly!
a. 4E on de+lared $ood# or he $ood# +ommonly u#ed.
b. '0-'(E on $ood# +alled :evenue Ceural :ae# %:C:). -here would be no
.all in #u+h remainin$ $ood#.
+. -wo #pe+ial rae# will be impo#ed-- 'E on #ilver or $old and (0E on li?uor.
-a8 on perol, die#el or aviaion urbine .uel are propo#ed o be ;ep ou .rom
he V6- #y#em a# hey would be +oninued o be a8ed, a# pre#enly
appli+able by he 2<- 6+.
(. =ni.orm :ae# in he V6- #y#em, +erain +ommodiie# are e8emped .rom a8. -he
a8able +ommodiie# are li#ed in he re#pe+ive #+hedule wih he rae#. V6-
propo#e# o ;eep he#e rae# uni.orm in all he #ae# #o he $ood# #old or pur+ha#ed
a+ro## he +ounry would #u..er he #ame a8 rae. 9i#+reion ha# been $iven o he
#ae# when i +ome# o .inali@in$ he :C: alon$ wih he re#ri+ion#. -hi# rae mu#
no be le## han '0E. -hi# will en#ure Ky doin$ hi# ha here will be level playin$
.ield# o avoid he rade diver#ion in +onne+ion wih he di..eren #ae#, pari+ularly
in nei$hborin$ #ae#
*. Co +on+e##ion o new indu#rie# -a8 2on+e##ion# o new indu#rie# i# done away
wih in he new V6- #y#em. -hi# wa# done a# i +reae# di#+repan+y in inve#men
de+i#ion. =nder he new V6- #y#em, he a8 would be .air and e?uiable o all.
4. 6d/u#men o. he a8 paid on he $ood# pur+ha#ed .rom he a8 payable on he $ood#
o. #ale 6ll he a8, paid on he $ood# pur+ha#ed wihin he #ae, would be ad/u#ed
a$ain# he a8, payable on he #ale, wheher wihin he #ae or in he +our#e o.
iner#ae. 4n +a#e o. e8por, he a8, paid on pur+ha#e ou#ide 4ndia, would be
re.unded. 4n +a#e o. he bran+h ran#.er or +on#i$nmen o. #ale ou#ide he #ae, no
re.und would be provided.
D. 2olle+ion o. a8 by #eller"dealer a ea+h #a$e. -he #eller"dealer would +olle+ he a8
on he .ull pri+e o. he $ood# #old and #how# #eparaely in he #ell invoi+e i##ued by
him
6. V6- i# no +a#+adin$ or addiive hou$h he a8 on he $ood# #old i# +olle+ed a ea+h
#a$e, i i# no +a#+adin$ or addiive be+au#e he ne e..e+ would be a# .ollow#! - he
a8, previou#ly paid on he #ale o. $ood#, would be .ully ad/u#ed. 4 will be li;e
levyin$ a8 on $ood#, #old in he la# #ae or a reail #a$e.
WHAT`S THE BIGGEST ADVANTAGE?
-he bi$$e# bene.i o. V6- i# ha i +ould unie 4ndia ino a lar$e +ommon mar;e. -hi# will
ran#lae o beer bu#ine## poli+y. 2ompanie# +an #ar opimi@in$ purely on lo$i#i+# o. heir
operaion#, and no on ba#ed on a8-minimi@aion. Aorrie# need no wai a +he+;-poin# .or
day#M hey +an @oom down he hi$hway# o heir de#inaion#. :edu+ed ran#i ime# and
lower invenory level# will boo# +orporae earnin$#. Jollowin$ are he #ome more advana$e
o. V6-! -
'. Simplification =nder he 2<- 6+, here are F ype# o. a8 rae#- 'E, (E, 4E, FE,
'0E, '(E, (0E and (DE. However, under he pre#en V6- #y#em, here would
only be ( ype# o. a8e# 4E on de+lared $ood# and '0-'(E on :C:. -hi# will
eliminae any di#pue# ha relae o rae# o. a8 and +la##i.i+aion o. $ood# a# hi# i#
he mo# u#ual +au#e o. lii$aion. 4 al#o help# o deermine he relevan #a$e o. he
a8. -hi# i# ne+e##ary a# he 2<- 6+ #ipulae# ha he a8 levie# a he .ir# #a$e or
he la# #a$e di..er. 2on#e?uenly, he ?ue#ion o. whi+h #a$e o. a8 i .all# under
be+ome# anoher rea#on .or lii$aion. =nder he V6- #y#em, a8 would be levied a
ea+h #a$e o. he $ood# o. #ale or pur+ha#e.
(. Adjustment of tax paid on purchased goods =nder he pre#en #y#em, he a8 paid
on he manu.a+ured $ood# would be ad/u#ed a$ain# he a8 payable on he
manu.a+ured $ood#. <u+h ad/u#men i# +ondiional a# #u+h $ood# mu# eiher be
manu.a+ured or #old. V6- i# .ree .rom #u+h +ondiion#.
*. Further such adjustment o. he pur+ha#ed $ood# would depend on he amoun o.
a8 ha i# payable. V6- would no have #u+h re#ri+ion#. 2<- would no have he
provi#ion# on re.und or +arry over upon #u+h $ood# e8+ep in +a#e o. e8por $ood# or
$ood#, manu.a+ured ou o. he +ounry or #ale o re$i#ered dealer. <imilarly, on
iner#ae #ale on a8-paid $ood#, no re.und would be admi##ible.
4. Transparency -he a8 ha i# levied a he .ir# #a$e on he $ood# or #ale or
pur+ha#e i# no ran#paren. -hi# i# be+au#e he amoun o. a8, whi+h he $ood# have
#u..ered, i# no ;nown a he #ub#e?uen #a$e. 4n he V6- #y#em, he amoun o. a8
would be ;nown a ea+h and every #a$e o. $ood# o. #ale or pur+ha#e.
D. Fair and Equitable V6- inrodu+e# he uni.orm a8 rae# a+ro## he #ae #o ha
un.air advana$e# +anno be a;en while levyin$ he a8.
6. Procedure of simplification Pro+edure#, relain$ o .ilin$ o. reurn#, paymen o. a8,
.urni#hin$ de+laraion and a##e##men are #impli.ied under he V6- #y#em #o a# o
minimi@e any iner.a+e beween he a8 payer and he a8 +olle+or.
7. Minimize the Discretion he V6- #y#em propo#e# o minimi@e he di#+reion wih
he a##e##in$ o..i+er #o ha every per#on i# reaed ali;e. Jor e8ample, here would
be no di#+reion involved in he impo#iion o. penaly, lae .ilin$ o. reurn#, non-
.ilin$ o. reurn#, lae paymen o. a8 or non paymen o. a8 or in +a#e o. a8 eva#ion.
<u+h #y#em would be .ree .rom all he#e hara##men
F. Computerization he V6- propo#e# +ompueri@aion whi+h would .o+u# on he a8
evader# by $enerain$ 78+epion :epor. 4n a lar$e number o. +a#e#, no pro+e##in$ or
#+ruiny o. reurn# would be re?uired a# i would .ree he a8 +omplian dealer# .rom
all he hara##men whi+h i# #o mu+h a par o. a##e##men. -he mana$emen
in.ormaion #y#em, whi+h would .orm a par o. ine$ral +ompueri@aion, would
ma;e he a8 deparmen more e..i+ien and re#pon#ive.
VALUE ADDED TAX IN MAHARASHTRA
Quick Flash Back
<ale# a8 wa# .ir# inrodu+ed in 4ndia in he hen Kombay Provin+e a# early a# Mar+h '&*F
where a a8 wa# impo#ed on #ale o. oba++o wihin +erain urban and #uburban area#. 4n he
year '&46, a $eneral #ale# a8 wa# inrodu+ed levyin$ #ale# a8 a he la# #a$e o. #ale o.
$ood#.
-he Kombay <ale# -a8 6+, '&D& inrodu+ed in '&D& underwen many +han$e# herea.er
and in July '&F', .ir# poin a8 wa# inrodu+ed wherein $ood# were +la##i.ied ino hree
main #+hedule#, broadly +overin$ a8 .ree $ood#, inermediae produ+# and .ini#hed $ood#.
-he K<- 6+ wa# repealed and Mahara#hra Value 6dded -a8 6+, (00( +ame ino .or+e
w.e... '
#
6pril, (00D o u#her in he pro$re##ive value added a8 #y#em in pla+e o. he old
#ale# a8 #y#em.
V6- i# a pro$re##ive and ran#paren #y#em o. a8aion whi+h eliminae# he +a#+adin$
impa+ o. muliple a8aion hrou$h a mulipoin a8aion and #e-o.. prin+iple. 4 promoe#
ran#paren+y, +omplian+e and e?uiy and here.ore, i# boh dealer .riendly and +on#umer
.riendly.
V6- bein$ a muli poin a8, envi#a$e# an in+rea#e in he number o. dealer# and i# ba#ed on
he +on+ep o. #el.-a##e##men and #el.-+omplian+e. 4 i# here.ore, ineviable ha he <ale#
-a8 9eparmen ran#.orm# i#el. ino a dealer .riendly, .o+u#ed and dynami+ deparmen o
+aer o he ever in+rea#in$ e8pe+aion# o. boh he Governmen and he -rade N 4ndu#ry.
<ale# -a8 9eparmen ha# a;en up he +hallen$e o ran#.orm heir #elve# and be available
.or a##i#in$ he dealer# in +omplyin$ wih he provi#ion# o. he law. -hey are in he pro+e##
o. in#allin$ a #ae-wide newor;ed 4- #y#em o +ompueri#e enire a8 admini#raion and
hope o provide online #ervi+e o he dealer# in due +our#e. -hey are al#o reali$nin$ heir
or$ani#aional #ru+ure o mee he +hallen$e# o. he new #y#em and #a;eholder#O
e8pe+aion#.
Part1 - Introduction
Background
Mahara#hra i# one o. he (' <ae# whi+h have inrodu+ed he Value 6dded -a8 %V6-)
#y#em o. a8aion .rom '# 6pril (00D. >ih he inrodu+ion o. V6-, he <ale# -a8
9eparmen ha# moved o a $lobally re+o$ni@ed #ale# a8aion #y#em ha ha# been adoped
by more han '*0 +ounrie#.
-he de#i$n o. Mahara#hra <ae V6- i# $enerally $uided by he be# inernaional pra+i+e#
wih re$ard o le$al .ramewor;, a# well a# operain$ pro+edure#. 6noher ;ey .a+or in
preparaion o. he de#i$n o. <ae level V6- i# he naional +on#en#u# on +erain i##ue#. -he
+on#en#u# ha# been arrived a hrou$h he di#+u##ion# in he 7mpowered 2ommiee o. <ae
Jinan+e Mini#er# on implemenaion o. <ae level V6-.
On '# 6pril (00D, V6- repla+ed he #in$le poin #ale# a8. <in$le poin #ale# a8 had a
number o. di#advana$e#, primarily ha o. double a8aion. V6- i# a modern and
pro$re##ive a8aion #y#em ha avoid# double a8aion. 4n addiion o o..erin$ he
po##ibiliy o. a #e-o.. o. a8 paid on pur+ha#e#, V6- ha# oher advana$e# .or boh bu#ine##
and $overnmen.
4 eliminae# +a#+adin$ impa+ o. double a8aion and promoe# e+onomi+ e..i+ien+y.
4 i# primarily a #el.-poli+in$, #el.-a##e##men #y#em wih more ru# pu on dealer#.
4 provide# he poenial .or a #ron$er manu.a+urin$ ba#e and more +ompeiive
e8por pri+in$.
4 i# invoi+e ba#ed, and a# a re#ul i o..er# a beer .inan+ial #y#em wih le## #+ope
.or error.
4 ha# an improved +onrol, me+hani#m re#ulin$ in beer +omplian+e.
4 widen# he, a8 ba#e and promoe# e?uiy.
V6- in Mahara#hra i# levied under a le$i#laion ;nown a# he Mahara#hra Value 6dded
-a8 6+ %MV6- 6+), #uppored by Mahara#hra Value 6dded -a8 :ule# %MV6- :ule#).
V6- i# levied on #ale o. $ood# in+ludin$ inan$ible $ood#.
The meaning of goods for VAT purposes
0Good#1 mean# every ;ind o. moveable propery in+ludin$ $ood# o. in+orporeal and
inan$ible naure bu here are #ome e8+lu#ion, #u+h a# new#paper#, a+ionable +laim#,
money, #hare# and #e+uriie# and loery i+;e#.
Ku#ine##e# en$a$ed in. he buyin$ and #ellin$ o. $ood# wihin he #+ope o. he V6- law are
re.erred o a# dealer#.
The meaning of 'sale' for VAT purposes
6 ran#a+ion o. #ale +an be a!
normal #ale o. $ood#M
#ale o. $ood# under hire-pur+ha#e #y#emM
deemed #ale o. $ood# u#ed 4 #upplied in he +our#e o. e8e+uion o. wor;# +onra+M
deemed #ale o. $ood# $iven on lea#e.
-he rae o. a8 appli+able o he $ood# #old under variou# +la##e# o. #ale# i# uni.orm.
However, in re#pe+ o. normal #ale# o. $ood# and deemed #ale# o. $ood# under wor;#
+onra+ and #pe+i.ied deemed #ale o. $ood# $iven on lea#e, he 6+ provide# .or an opional
mehod .or di#+har$in$ a8 liabiliy by way o. +ompo#iion. Kein$ #o, he a8 liabiliy ha# o
be deermined wih re.eren+e o he opion e8er+i#ed by he dealer .or di#+har$in$ a8
liabiliy.
Businesses covered by VAT
-he V6- #y#em embra+e# all bu#ine##e# in he produ+ion and #upply +hain, .rom
manu.a+ure hrou$h o reail. V6- i# +olle+ed a ea+h #a$e in he +hain when value i#
added o $ood#. ' applie# o al' bu#ine##e#, in+ludin$ imporer#, e8porer#, manu.a+urer#,
di#ribuor#, whole#aler#, reailer#, wor;# +onra+or# and le##or#.
Part 2 - Registration under VAT
Rules for registration
4. a dealerB# annual urnover e8+eed# he below menioned hre#hold, hen i mu# re$i#er
wih he lo+al o..i+e o. he <ale# -a8 9eparmen.
6ll Ji$ure# in :#.
2ae$ory 6nnual -urnover o.
<ale#
-urnover o. #ale# or
pur+ha#e o. a8able
$ood# no le## han
Jee# payable on
re$i#raion
4mporer ',00,000 '0,000 '00
Oher# D,00,000 '0,000 '00
4. he dealerB# urnover i# le## han he above hre#hold, hen hey are no liable o +olle+ and
pay V6-. However, i. a dealer wi#he# o avail he bene.i# o. bein$ a re$i#ered dealer, hen
hey may apply .or volunary re$i#raion by payin$ a .ee o. :#.D,000" -.
Benefits of being a registered dealer
6# a re$i#ered dealer, hey are eniled o!
+olle+ V6- on he #ale#M
+laim #e-o.. o. a8 %inpu a8 +redi) paid on pur+ha#e#M
4##ue a8 invoi+e# and, be +ompeiive.
Effective date of registration
-he e..e+ive dae o. re$i#raion, ha i#, he dae .ron whi+h a dealer may +har$e V6- on
#ale#M will depend on he dae hey .ir# be+ome liable o pay V6-. -hi# dae will be
deermined a# .ollow#!
a) New businesses:
4. a dealer i# no re$i#ered be+au#e heir annual urnover i# le## han he hre#holdM heir
liabiliy o a++oun .or V6- #ar# .rom he dae hey +ro## he hre#hold.
b) Existing businesses:
4. a dealer oo; over an e8i#in$ bu#ine## ha i# re$i#ered .or V6-, hen hey will be liable
o pay a8 on #ale# .rom he dae hey oo; over he bu#ine##.
c) Voluntary registration:
4. a dealer i# re$i#ered on a volunary ba#i#, hen he will be liable o a++oun .or V6- .rom
he dae #hown on he +eri.i+ae o. re$i#raion.
d) Late registration:
4. a dealerB# urnover ha# e8+eeded he appropriae hre#hold bu hey have applied lae .or
re$i#raion, hen he +an +har$e V6- on hi# #ale# only a.er hey are re$i#ered, i.e., .rom he
dae #hown on he +eri.i+ae o. re$i#raion.
Jurher, havin$ +ro##ed he hre#hold, i i# an o..en+e o be en$a$ed in bu#ine## a# a dealer
wihou a +eri.i+ae o. re$i#raion
Certificate of registration
6 dealer #hould prominenly di#play he +eri.i+ae and holo$ram, or a +opy o. he +eri.i+ae
and holo$ram, a ea+h pla+e where hey +arry +an on heir bu#ine##.
4. a dealer ha# more han one pla+e o. bu#ine##, hen <ale# -a8 O..i+e will provide hem,
upon heir re?ue#, one +opy o. he +eri.i+ae o. re$i#raion and holo$ram .or ea+h
addiional pla+e o. bu#ine##.
4. a dealer lo#e# hi# " her +eri.i+ae o. re$i#raion or holo$ram, or i i# a++idenally de#royed
or de.a+ed, hen hey may obain a dupli+ae +opy o. he +eri.i+ae o. holo$ram .rom heir
#ale# a8 o..i+e.
-he +eri.i+ae o. re$i#raion and holo$ram i# per#onal o he dealer o whom i i# i##ued and
i# non-ran#.erable.
Changes to business circumstances
4., .ollowin$ dealer re$i#er, here are any amendmen# o he deail# hey +an be repored
while applyin$ .or re$i#raion, i mu# done wihin 60 day# o. he +han$e, in.orm u# in
wriin$.
>here he amendmen involve# a!
+han$e in he name o. he bu#ine##M
+han$e in he +on#iuion o. he bu#ine## wihou di##oluion o. he .irmM
+han$e in he ru#ee# o. a -ru#M
+han$e in he $uardian#hip o. a wardM
+han$e in he 5ara o. a Hindu =ndivided JamilyM
+onver#ion o. Privae limied 2ompany o a Publi+ limied 2ompanyM
+han$e in he pla+e o. bu#ine##M
addiion o. new pla+e o. bu#ine##M
.ormaion o. a parner#hip wih re$ard o he bu#ine##,
an appli+aion made by a dealer .or in#olven+y or li?uidaion o. heir bu#ine##M
an appli+aion made a$ain# dealerB# bu#ine## .or in#olven+y or li?uidaionM
openin$ or +lo#in$ o. a ban; a++ounM
6 dealer will no need o ma;e a .re#h appli+aion .or re$i#raion. However, he
+ommuni+aion o he :e$i#erin$ 6uhoriy +on+erned #hould be made wihin #i8y day# o.
he +han$e or o++urren+e o. he even.
Cancellation of registration
6 dealer will be liable o pay V6- while heir re$i#raion i# e..e+ive. 4. however, heir
urnover .all# below he hre#hold, he may +hoo#e o apply .or +an+ellaion o. hi#
re$i#raion. However, he #hould +oninue o +olle+ and pay V6- in he normal way unil
hi# re$i#raion i# .ormally +an+elled. 6lernaively, hey may be allowed he re$i#raion o
+oninue.
4. a dealer!
di#+oninue he bu#ine##M
di#po#e o. or #ell or ran#.er he bu#ine##M
6 dealer mu# in.orm he <ale# -a8 9eparmen wihin *0 day# o. he even. 4n +a#e o.
di#po#al or #ale o. bu#ine##, heir #u++e##or will need o apply .or a .re#h re$i#raion
+eri.i+ae.
Jor +an+ellaion o. re$i#raion a dealer #hould #ubmi .orm '0* whi+h i# available wih he
lo+al #ale# a8 o..i+e. 4 +an al#o be downloaded .rom he web#ie
www.vat.maharashtra.gov.in
4. he <ale# -a8 9eparmen +an+el# he dealerB# re$i#raion, hey mu# reurn he 2eri.i+ae
o. :e$i#raion
-he +an+ellaion o. heir +eri.i+ae doe# no a..e+ heir liabiliy o pay any a8, inere# or
penalie# in re#pe+ o. any period prior o he dae o. +an+ellaion o. heir re$i#raion.
The obligations of a registered dealer
Jollowin$ are he re$i#raion, whi+h dealerB# are obli$ed o!
di#play prominenly heir +eri.i+ae o. re$i#raion and holo$ram in heir pla+e o.
bu#ine##, and a +opy o. he +eri.i+ae and holo$ram in ea+h o. he oher pla+e# where
hey +arry on heir bu#ine##M
in.orm heir #ale# a8 o..i+e o. any +han$e# in he deail# previou#ly repored o he
#ale# a8 o..i+eM
+olle+ V6- on all #ale# a appropriae rae#M
+al+ulae he a8 due and #ubmi +orre+, +omplee and #el. +on#i#en reurn# and pay
he amoun o. a8 due on or be.ore he due dae#M
i##ue a8 invoi+e " bill or +a#h memorandum o all +u#omer#M
mainain ade?uae re+ord# and reain hem .or a period o. .ive year# .rom he end o.
he a8 year o whi+h hey relaeM
e8end +o-operaion o he o..i+er# o. he <ale# -a8 9eparmen a dealerB# bu#ine##
premi#e# and provide all a##i#an+e o hem o di#+har$e heir duie#.
Part 3 - Explaining VAT
How VAT works
>hen a dealer #ell $ood#, he #ale pri+e i# made up o. wo elemen#M he #ellin$ pri+e o. he
$ood# and he a8 on he #ale. -he a8 i# payable o he <ae Governmen.
-he a8 payable on #ale# i# o be +al+ulaed on he #ellin$ pri+e. -he a8 paid on pur+ha#e#
#uppored by a, valid a8 invoi+e i# $enerally available a# #e-o.. %inpu, a8 +redi) while
di#+har$in$ he a8 liabiliy on #ale#.
Example
-he .ollowin$ e8ample #how# how he V6- wor;# hrou$h he +hain .rom manu.a+urer o
reailer.
Company A buy# iron ore and oher +on#umable# and manu.a+ure# #ainle## #eel uen#il#M
Partnership firm B buy# he uen#il# in bul; .rom Company A and poli#he# hemM
shopkeeper C buy# #ome o. he uen#il# and pur+ha#e# pa+;in$, maerial .rom vendor D,
pa+;a$e# hem and #ell# he pa+;ed uen#il# .or he publi+.
%-he #ale and pur+ha#e .i$ure# #hown in he e8ample are e8+ludin$ a8)
Particulars Amount
(Rs.)
VAT
4 (Rs.)
Company A
2o# o. iron are and +on#umable# D0,000 2000
<ale# o. unpoli#hed #ainle## #eel uen#il# ',D0,000
Value added 1,00,000
2ompany 6 i# liable o pay V6- on :#.',D0,000"- , 4E 6000
Ae## <e O.. %(000)
Net VAT amount to pay with the Return %Coe! -a8 invoi+e
i##ued by 2ompany 6 will #how #ale pri+e a# :#.',D0,000"- a8
a# :#.6,000"-. -here.ore, he oal invoi+e value will be
:#.',D6,000"-)
4000
Partnership B
Pur+ha#e# unpoli#hed #ainle## #eel uen#il#. ',D0,000
<ale# poli#hed #ainle## #eel uen#il# ',F0,000
Value added 30,000
Parner#hip K i# liable o pay V 6- on :#.',F0,000 a 4E 7,(00
Ku +an +laim #e o.. o. a8 paid on pur+ha#e# %6,000)
Net VAT amount to pay with the Return 1200
Shopkeeper C
Pur+ha#e# poli#hed #ainle## #eel uen#il# ',F0,000
Pa+;in$ maerial D,000
-oal Pur+ha#e# ',FD,000
<ale# (,(D,000
Value added 40,000
<hop;eeper 2 i# liable o pay V 6- on :#.(,(D,000 , 4E &,000
<e o.. o. a8 paid on pur+ha#e# %Rs.7,200 + Rs.200 o. pa+;in$
maerial)
7,400
Net VAT amount to pay with the Return 1,600
Vendor D
-a8 paid +o## Cil
<ale# D,000
Value Added 5,000
Vendor D is liable to pay VAT on Rs.5,000 4 200
-he V6- due on he value added hrou$h he +hain, i.e., 4E on
:#.(,(D,000 i# !
9,000
-he <ae Governmen re+eived he a8 in #a$e#. -he paymen# o. a8 were a# .ollow#!
Particulars Amount (Rs.)
<upplier# o. 2ompany 6 (,000
2ompany 6 4,000
Parner#hip K ',(00
<hop;eeper 2 ',600
Vendor 9 (00
Total 9,000
-hu#, hrou$h a +hain o. a8 on #ale pri+e and #e o.. on pur+ha#e pri+e, he +a#+adin$ impa+
o. a8 i# oally eliminaed.
<in+e #e-o.. o. a8 on pur+ha#e# i# $iven only on pur+ha#e# .rom re$i#ered dealer# where
a8 i# +olle+ed #eparaely, dealerB# pur+ha#e# .rom unre$i#ered dealer#, impor#, iner-#ae
pur+ha#e# and pur+ha#e# .rom re$i#ered dealer# wihou #eparae a8 +olle+ion are no
eniled o #e-o...
4n pra+i+e, he a8 i# .inally borne by he ulimae +on#umer, who i# no a re$i#ered dealer,
in hi# +a#e, people who buy uen#il# .rom he #hop;eeper 2.
Rates of value added tax
-here are wo main rae# o. V6- 4E and '(.DE. -he $ood# are $rouped ino .ive #+hedule#
a# under!
Schedule Rate of tax Illustrative Items
6 0E Ve$eable#, mil;, e$$#, bread
K 'E Pre+iou# meal# and pre+iou# #one# and heir /ewellery
2 4E :aw maerial#, noi.ied indu#rial inpu#, noi.ied in.ormaion
e+hnolo$y produ+# and a .ew e##enial iem#
9 (0E and
above
Ai?uor, perol, die#el e+
7 '(.DE Oher han iem# #pe+i.ied in #+hedule# 6, K, 2 N 9.
%-he li# i# illu#raive and no e8hau#ive. Plea#e re.er o he #+hedule# .or deail#)
Difference between tax free goods and exempt sales
4 i# #omeime# +on.u#in$ o have $ood# ha are a8 .ree and #ale# ha are e8emp. Koh
re#ul in no V6- bein$ +har$ed, #o wha i# he di..eren+eG
-a8 .ree $ood# do no ara+ a8 a any #a$e o. #ale or in any ype o. ran#a+ion, wherea#,
e8emped #ale# are +erain ype# o. ran#a+ion#, vi@., e8por #ale# whi+h are e8emp .rom
a8.
Composition schemes
2erain dealer# may .ind i di..i+ul o ;eep deailed re+ord# .or +laimin$ #e-o... Jor #u+h
dealer#, a #impler and opional mehod o. a++ounin$ .or V6- ha# been inrodu+ed. -hi#
mehod i# he +ompo#iion #+heme. 4 may be noed ha +ompo#iion #+heme i# no mean o
be a a8 +on+e##ion #+heme bu only a #impli.i+aion o. a8 +al+ulaion and paymen #y#em.
Tax payable by dealers opting for composition in lieu of VAT
-he .ollowin$ +la##e# o. dealer# are eli$ible .or opion o pay a8 under +ompo#iion!
:e#eller# #ellin$ a reail, i.e., o +on#umer#,
:e#auran#, eain$ hou#e#, hoel %e8+ludin$ hoel# havin$ $radaion o. OJour <arB
and above), re.re#hmen room#, boardin$ e#abli#hmen#, +lub# and +aerer#,
Ka;er#,
9ealer# in #e+ond-hand pa##en$er moor vehi+le# and
>or;# +onra+or#
9ealer# en$a$ed in he bu#ine## o. providin$ mandap, pandal, #hamiana.
6++ordin$ly, i. he dealer ha# oped .or paymen o. a8 liabiliy under +ompo#iion, he a8
liabiliy ha# o be deermined in erm# o. he $uideline# $iven in he relevan Coi.i+aion in
hi# re$ard. 6par .rom he erm# and +ondiion# $overnin$ ea+h o. he +ompo#iion #+heme#,
he Coi.i+aion e8plain# he mehodolo$y .or +ompuaion o. urnover liable o a8 and he
rae o. +ompo#iion payable.
6 dealer +an op .or he +ompo#iion opion a he be$innin$ o. he .inan+ial year and ha# o
+oninue o be a +ompo#iion dealer a lea# ill he end o. ha .inan+ial year. 4. dealer wi#he#
o #wi+h, over o normal V6-, he +an do #o only a he be$innin$ o. he ne8 .inan+ial year.
However, a new dealer +an op .or +ompo#iion a he ime o. re$i#raion.
4n re#pe+ o. wor;# +onra+, he +onra+or +an +hoo#e o di#+har$e a8 liabiliy under
+ompo#iion opion. Moreover, #u+h an opion +an be e8er+i#ed by he +onra+or on +onra+
o +onra+ ba#i#.
Part 4 - Calculating tax liability
4n, order o +al+ulae how mu+h a8 a dealer ha# o pay, he mu#, .ir# deermine hi# urnover
o. #ale# and urnover o. pur+ha#e#. -he #e+ond #a$e i# o a#+erain he amoun o. a8 due .or
paymen.
Calculating turnover of sales and purchases
-he urnover o. #ale# i# he oal o. he amoun# re+eived or re+eivable %e8+ludin$ V6-
+har$ed #eparaely) in re#pe+, o. he #ale o. $ood#, le## he amoun re.unded o a pur+ha#er
in re#pe+ o. $ood# reurned, wihin #i8 monh# o. he dae o. he #ale.
<imilarly, he urnover o. pur+ha#e# i# he oal o. he amoun# paid or payable %e8+ludin$
V6- +har$ed #eparaely) in re#pe+ o. he pur+ha#e o. $ood# le## %he amoun# repaid o
dealer in re#pe+ o. $ood# hey reurn, wihin #i8 monh# o. he dae o. pur+ha#e.
Credit notes and debit notes.
4. he #ale pri+e, or he pur+ha#e pri+e, o. any $ood# i# varied and eiher a +redi noe or a
debi noe i# i##ued, hen he +redi noe or he debi noe, a# he +a#e may be, #hould
#how #eparaely, he a8 and he pri+e.
be a++ouned .or in he period in whi+h he appropriae enrie# are made in heir boo;# o.
a++oun#.
Special cases
Auctioneers
4. dealer i# an au+ioneer, hen hey mu# in+lude in heir urnover, he pri+e o. he $ood# hey
au+ion .or heir prin+ipal
Hotels
-here are #pe+ial rule# .or hoel# and oher e#abli#hmen# ha provide boardin$ and lod$in$
.or an in+lu#ive amoun.
-he rule# provide a .ormula o enable hem o +al+ulae heir urnover o. #ale# .or meal#
%.ood and bevera$e#) whi+h hey provide.
-he #upply o. .ood in a re#auran al#o in+lude# an elemen o. #ervi+e. Ku he .ull amoun
+har$ed i# he #ale pri+e .or he purpo#e# o. +al+ulain$ urnover and a8.
Works contracts
V6- applie# only o he #ale o. $ood#. <upply o. #ervi+e# i# no liable o V6-. >or;#
+onra+# are deemed #ale# where boh, $ood# and #ervi+e# are provided in a ran#a+ion and
+anno be #eparaed.
6 wor;# +onra+ may involve he +reaion o. immoveable propery, e.$. a hou#e, a .a+ory or
a brid$e. <ome oher e8ample# o. wor;# +onra+# are phoo$raphy, repair# N mainenan+e
e+.
-o +al+ulae he amoun a dealer #hould in+lude i in heir urnover o. #ale#, #o ha hey may
dedu+ i .rom he oal +onra+ pri+e, he
+o## o. labour and #ervi+e +har$e#.
amoun paid o #ub-+onra+or#.
+har$e# .or plannin$ and de#i$nin$, and any ar+hie+O# .ee#.
hirin$ +har$e# .or ma+hinery and ool#.
+o# o. +on#umable#, #u+h a#, waer, $a# and ele+ri+iy.
9ealerB# admini#raive +o## relain$ o labour and #ervi+e# and any oher #imilar
e8pen#e#.
any pro.i elemen ha relae# o he #upply o. labour and #ervi+e#.
6lernaively, in lieu o. he dedu+ion# a# above, a dealer may +hoo#e o di#+har$e he
liabiliy ari#in$ on wor;# +onra+# by re.errin$ o he able pre#+ribed in he rule#.
4. he dealer .ind# ha i i# oo +ompli+aed o +al+ulae he dedu+ion#, hen hey may op .or
a +ompo#iion #+heme .or any wor;# +onra+.
Sales and purchases not liable to tax under VAT
-he V6- law #pe+i.i+ally e8+lude# .rom value added a8 all impor#, e8por# and iner-#ae
ran#a+ion#. -he#e ran#a+ion# are +overed by he 2<- 6+. <imilarly, ran#a+ion# ha a;e
pla+e ou#ide Mahara#hra are no wihin he #+ope o. MV6- 6+.
Point of levy in certain cases
Hire purchase
>here here i# a hire pur+ha#e a$reemen or an a$reemen .or #ale by in#allmen#, he dae
o. he #ale i# deemed o be he dae o. he delivery o. $ood#. -hi# i# de#pie he .a+ ha le$al
owner#hip o. he $ood# only pa##e# o he buyer a.er paymen o. he .inal in#allmen.
4. he hire-pur+ha#e a$reemen #pe+i.ie# he inere# +omponen hen in +al+ulain$ he #ale#
pri+e, dealer #hould di#re$ard he inere# +omponen in+luded in he a$reemen.
Calculating the amount of VAT due on sales
9ealer #hould al#o ma;e #ome ad/u#men# o he oal urnover o. #ale# o arrive a he
amoun on whi+h a8 i# due.
Jrom he oal #ale# one #hould dedu+
he oal o. e8por# and iner-<ae #ale#.
he oal o. #ale# o. $ood# ha are a8 .ree, and
bran+h " +on#i$nmen ran#.er# o lo+aion# in Mahara#hra a# well a# oher <ae#.
he a8 +olle+ed.
-o +al+ulae he a8 due, dealer #hould #ar allo+ain$ heir urnover o. #ale# in he reurn
period %ne o. he above dedu+ion#) o he rae# o. a8 hey have been +har$ed. -hey #hould
al#o en#ure ha he +orre+ a8 rae# are applied. -he in.ormaion #hould be readily available
.rom heir re+ord#. -hi# $ive# he oal o. #ale# a8 due.
Calculating the turnover of purchases
:e+ord# will provide he oal .i$ure, bu hey may no have paid V6- on all heir pur+ha#e#.
-hey mu# now dedu+ he oal value o.
impor# .rom ou o. 4ndia.
iner-<ae pur+ha#e#.
pur+ha#e# o. a8 .ree $ood#.
dire+ pur+ha#e# .rom e8emped uni# under he Pa+;a$e <+heme o. 4n+enive#.
+on#i$nmen ran#.er#, and
lo+al pur+ha#ed .rom unre$i#ered dealer#.
lo+al pur+ha#e# .rom re$i#ered dealer# no #uppored by a8 invoi+e.
-he re#ulin$ .i$ure repre#en# pur+ha#e# a$ain# a8 invoi+e# .rom re$i#ered dealer#.
Calculating the amount of set off due (VAT paid on purchases)
-hi# i# he ne8 #a$e o. a8 +al+ulaion. 6 hi# #a$e V6- i# +har$ed on oal pur+ha#e#.
9ealer mu#, however, ma;e #ome ad/u#men# o hi# amoun .or, in +erain +a#e#, he .ull
#e o.. o. he V6- paid on pur+ha#e# i# no available.
Adjustments to tax available for set off
4. dealerB# pur+ha#e# in+lude $ood#, u#ed
o a# .uel, or
o .or he manu.a+ure o. any a8-.ree $ood#, or
o a# pa+;a$in$ .or a8-.ree $ood#, hi# $ood# #hould be #old.
-hen a dealer mu# +al+ulae he value o. ho#e iem# and dedu+ a8 , 4E o. he
+orre#pondin$ pur+ha#e pri+e .rom he amoun oherwi#e available .or #e o... %Co
appli+able o P<4 dealer# oher han he Cew Pa+;a$e <+heme o. 4n+enive# .or -ouri#m
Pro/e+#, '&&& and al#o o manu.a+urer# o. a8-.ree #u$ar or .abri+# +overed by 7nry 6 4D
and where #u+h $ood# are #old in he +our#e o. e8por .allin$ under #e+ion D o. he 2<- 6+,
'&D6).
<imilarly, i. he $ood# are #o+; ran#.erred by way o. bran+h " +on#i$nmen ran#.er o a
pla+e ou#ide he <ae, dedu+ a8 , 4E %' E in re#pe+ o. $ood# +overed by <+hedule K) o.
he +orre#pondin$ pur+ha#e pri+e .rom he amoun oherwi#e available .or #e o...
9ealer mu# al#o ma;e .urher ad/u#men# a# .ollow#! -
4. hey have been u#ed any $ood# %oher han +apial a##e#) a# par o. a wor;#
+onra+ .or whi+h hey have been oped .or paymen +ompo#iion , FE on he oal
+onra+ value, hey mu# al#o dedu+ *6E o. he amoun .rom he #e o.. oherwi#e
available %4E o. pur+ha#e pri+e in re#pe+ o. +on#ru+ion +onra+# .or whi+h hey
have been oped .or paymen o. +ompo#iion , DE on oal +onra+ value).
>here a dealerB# #ale# are le## han D0 E o. heir $ro## re+eip#, hen hey +an +laim
#e o.. only on ho#e pur+ha#e# o. $ood# or pa+;in$ maerial# e..e+ed in ha year
where he +orre#pondin$ $ood# are #old wihin #i8 monh# o. he dae o. pur+ha#e or
+on#i$ned wihin he #aid period o anoher <ae by way o. #o+; ran#.er#.
4n re#pe+ o. o..i+e e?uipmen, .urniure or .i8ure# whi+h have been reaed a#
+apial a##e#, a dealer #hould redu+e #e-o.. oherwi#e eniled by an amoun e?ual o
4E o. he pur+ha#e pri+e.
4. a dealer i# he reailer o. li?uor vendor and i# a+ual #ale pri+e# are le## han he
Ma8imum :eail Pri+e, here i# a #pe+ial .ormula .or +al+ulain$ he amoun o. he
ad/u#men. 7..e+ively hi# mean# ha, i. a dealer #ell# a 7DE o. he M:P hen hey
+an +laim #e o.. only o he e8en o. 7DE o. he a8 paid.
6 dealer +an no +laim any #e o.. .or he a8 paid on any pur+ha#e# ha remain
un#old on he dae when bu#ine## di#+oninue#.
6ll hi# in.ormaion #hould be available .rom heir re+ord#, in+ludin$ a8 invoi+e# and bill#
or +a#h memorandum hey have i##ued, and he a8 invoi+e# hey have re+eived.
Set off not available
-here are variou# iem# on whi+h #e-o.. i# no available #u+h a#, $ood# o. in+orporeal or
inan$ible +hara+er oher han ho#e #pe+i.ied, pa##en$er moor vehi+le#, moor #piri#, +rude
oil, buildin$ maerial u#ed .or +on#ru+ion e+.
Conditions for claiming set off
6 dealer +an +laim #e o.. only .or V6- paid on pur+ha#e i. hey have a valid a8 invoi+e .or
ha ran#a+ion and hey had mainain a++oun o. pur+ha#e# #howin$ he #pe+i.ied deail#.
Tax payable
-he amoun o. #e-o.. admi##ible +an be ad/u#ed a$ain# a8 payable. -he amoun o. ne a8
payable i# he oal o. #ale# a8 +olle+ed on #ale# le## he #e-o.. available.
Refund cases
4. he amoun o. #e-o.. admi##ible durin$ he period i# more han he amoun o. a8 payable,
hen dealerB# reurn would re.le+ a balan+e re.undable o he dealer. -he amoun o. #e-o..
+an be more han he a8 payable .or a variey o. rea#on#, #u+h a#
4npu# are a8able a hi$her rae a# +ompared wih he rae o. a8 on oupu.
Oupu# are a8-.ree $ood# while inpu# +arry a8.
Oupu# are e8por #ale#.
Oupu# are 2<- #ale# whi+h are a8able a he +on+e##ional rae o. 2<-.
Manu.a+ured $ood# or radin$ $ood# are ran#.erred o bran+he# ou#ide he <ae or
are #en on +on#i$nmen ran#.er#.
6par .rom par o. he admi##ible #e-o.. whi+h +an remain unuili@ed, e8+e## +redi +an be
on a++oun o.!
unuili#ed porion o. a8 dedu+ed a #our+e or
re.und paymen order or
ad-ho+ paymen made i# more han a8 payable.
>haever may be he rea#on .or +redi in e8+e## o. a8 due and payable durin$ a a8 period,
dealer# are eli$ible o +laim re.und o. #u+h e8+e## +redi. Jor he purpo#e o. $ranin$ re.und,
dealer# have been +la##i.ied under wo +ae$orie# vi@. a) #pe+i.ied +la## o. dealer# and b)
oher dealer#
Refund to specified class of dealers
<pe+i.ied +la##e# o. dealer# are ! -
78porer# e8porin$ ou o. he +ounry or dealer# #ellin$ o an e8porer a$ain# .orm
H.
6 uni #e-up in <7P or <-P or 7H-P or a '00E 7O= uni. -he#e uni# have o be
+eri.ied by he 2ommi##ioner o. <ale# -a8.
6n 7nilemen 2eri.i+ae holder availin$ o. he bene.i o. in+enive# under he
Pa+;a$e <+heme o. 4n+enive# %P<4).
<pe+i.ied +la## o. dealer# and he dealer# who have made a #ale in he +our#e o. iner-<ae
rade or +ommer+e and in he reurn he ha# #hown any amoun o be re.undable are eli$ible
o +laim re.und in ea+h o. he reurn# .iled by hem. Jull amoun o. e8+e## +redi +an be
+laimed a# re.und due .or he reurn period.
-he dealer eli$ible o +laim re.und ha# o .ile re.und appli+aion in Jorm D0'. -he
appli+aion ha# o be .iled wih he :e.und Kran+h. -he :e.und Kran+h may a#; .or Kan;
Guaranee and any relevan in.ormaion .or +he+;in$ +orre+ne## o. re.und +laimed.
Cormally, re.und would be $raned wihin one monh .rom he re+eip o. Kan; Guaranee or
wihin hree monh# .rom he dae o. re+eip o. re.und appli+aion in Jorm D0', or a# he +a#e
may be, he dae o. re+eip o. he addiional in.ormaion, whi+hever i# laer.
Refund to other dealers
Oher dealer# are no eli$ible o $e re.und in ea+h o. he reurn .iled. -hey are re?uired o
+arry .orward e8+e## +redi o he ne8 reurn wihin he #ame .inan+ial year and +laim re.und
o. e8+e## +redi in he reurn .or he period endin$ Mar+h.
-he dealer +laimin$ re.und in Mar+h reurn ha# o ma;e re.und appli+aion in Jorm D0'. -he
appli+aion ha# o be .iled wih he :e.und <e+ion. Cormally, re.und would be $raned
wihin #i8 monh# o. he end o. he year o whi+h he reurn relae#. However, re.und would
be $raned wihin #i8 monh# o he new dealerB# a he end o. he year #u++eedin$ he #aid
year.
Audit of refund claims
-he re.und $raned o dealer would be #ub/e+ o audi by he :e.und 6udi <e+ion. -he
audi may be a;en up be.ore $ranin$ he re.und or a.er he re.und i# $raned. Cormally,
re.und# made a$ain# Kan; Guaranee would be a;en up .or audi a.er he re.und ha# been
$raned. 9urin$ he +our#e o. he audi, he audi eam will +he+; dealerB# eli$ibiliy o +laim
re.und and he +orre+ne## o. he amoun o. re.und +laimed by hem.
Interest on delayed refund
Co inere# i# payable on he re.und due o a dealer a# per reurn# .iled by a dealer. However,
i. $ranin$ o. re.und i# delayed beyond he above menioned period#, dealer i# eli$ible .or
inere# .or delayed paymen. <imple inere# a he rae o. 6E per year would be payable .or
he period .rom he due dae o he dae o. re.und.
Some tips for getting timely refund
9ealerB# +laim o. re.und would be pro+e##ed .a#er i.! -
-hey had .iled he reurn wih he :eurn# bran+h a# per he pre#+ribed ime #+hedule.
-he reurn .iled by he dealerB# #hould be +orre+, +omplee and #el.-+on#i#en.
-hey #hould have +laimed re.und a# per he appropriae periodi+iy.
-he amoun o. re.und due o hem #hould be +ompued +orre+ly.
:e.und appli+aion in Jorm D0' i# .iled wih he :e.und# bran+h in ime.
-hey #hould have promply .urni#hed Kan; Guaranee and oher deail# when +alled
.or.
-hey #hould ;eep ready all he do+umen# and re+ord# .or audi.
-hey #hould .ile he reurn .or a period .or whi+h hey are re?uired o .ile.
-hu#, i. hey are re?uired o .ile a ?uarerly reurn, bu hey .ile a monhly reurn, hen he
re.und would no be $raned .or he monhly reurn. 4n order o be eli$ible .or re.und, hey
would have o .ile a ?uarerly reurn.
Part 5 - Filing a return and paying the tax
V6- i# a #el.-a##e##men #y#em and dealerB# are e8pe+ed o ma;e #el. a##e##men .or a
$iven a8 period and de+lare heir V6- liabiliy by .ilin$ reurn#. -he reurn# have o be .iled
in he pre#+ribed .orm and by he #pe+i.ied dae#. Jurher, hey are al#o re?uired o pay he
a8 due a# per he reurn .iled.
4n Mahara#hra, reurn .orm i# reurn-+um-+halan. 6# #u+h, .ilin$ o. reurn# alon$-wih
paymen o. a8 on or be.ore he due dae a he noi.ied ban; would be +on#idered a#
#u..i+ien +omplian+e. However, where any amoun o. a8 in+ludin$ inere# or penaly i# due
a# per a .re#h or revi#ed reurn, hen hey #hould .ir# pay #u+h amoun in Governmen
-rea#ury and .ile he reurn in he lo+al o..i+e o. <ale# -a8 9eparmen alon$ wih a #el.
ae#ed +opy o. he +halan. 4. no paymen i# due or a re.und i# +laimed a# per he reurn, hey
are al#o re?uired o .ile he reurn in he lo+al o..i+e o. he <ale# -a8 9eparmen.
Return forms
-he reurn .orm# pre#+ribed are a# .ollow#.
Form No. To Be Used By
((' 6ll V6- dealer# oher han dealer# e8e+uin$ wor;# +onra+, dealer#
en$a$ed in lea#in$ bu#ine##, +ompo#iion dealer# %in+ludin$ dealer# opin$
.or +ompo#iion only .or par o. he a+iviy o. he bu#ine##), P<4 dealer# and
noi.ied Oil 2ompanie#.
((( 6ll +ompo#iion dealer# who#e enire urnover i# under +ompo#iion
%e8+ludin$ wor;# +onra+or# opin$ .or +ompo#iion and dealer# opin$ .or
+ompo#iion only .or par o. he a+iviy o. he bu#ine##).
((* V6 - dealer# who are al#o in he bu#ine## o. e8e+uin$ wor;# +onra+#,
lea#in$ and dealer# opin$ .or +ompo#iion only .or par o. he a+iviy o. he
bu#ine##.
((4 P<4 dealer# holdin$ 7nilemen 2eri.i+ae %-ran#a+ion# by P<4 dealer#
relain$ o he bu#ine## o. e8e+uion o. wor;# +onra+#, lea#in$, .radin$ and
+ompo#iion only .or par o. he a+iviy o. he bu#ine## o be in+luded in a
#eparae reurn in Jorm ((*).
((D Coi.ied Oil 2ompanie# %-ran#a+ion# by O4A 2ompanie# relain$ o he
bu#ine## o. e8e+uion o. wor;# +onra+#, lea#in$ and +ompo#iion only .or
par o. he a+iviy o. he bu#ine## o be in+luded in a #eparae reurn in Jorm
((*).
6 dealer +an re.er o he in#ru+ion# $iven in he .orm be.ore .illin$ he reurn.
Plea#e en#ure ha he reurn .or a a8 period +over# all he ran#a+ion# o. #ale#, pur+ha#e#,
bran+h ran#.er# re+eived, bran+h ran#.er# made e+. Jurher, hey mu# en#ure ha all he
+olumn# o. he reurn are duly .illed in and are +learly le$ible. 4. a pari+ular +olumn i# no
relevan, plea#e do no leave i blan; bu menionQ no appli+ableQ. -he reurn .iled by hem
mu# be +orre+, +omplee and #el.-+on#i#en.
Time schedule for filing returns
Periodicity of filing returns is as follows: -
:eailer# who have oped .or +ompo#iion #hould .ile #i8-monhly reurn#.
Cewly re$i#ered dealer# #hould .ile ?uarerly reurn# unil he end o. he year in
whi+h hey .ir# re$i#er.
6ll pa+;a$e #+heme dealer# #hould .ile ?uarerly reurn#.
6ll oher dealer# #hould .ile reurn# a# $iven below !-
o 9ealer# who#e a8 liabiliy in he previou# year wa# le## han :#.',OO,OOO/-
%:#.'la;h) or who#e enilemen .or re.und wa# le## han :#.'0,OO,OOO/-
%:#.'0la;h) #hould .ile #i8-monhly reurn#.
o 9ealer# who#e a8 liabiliy in he previou# year wa# more. han :#.'0,00,000-
%:#.'0la;h) or who#e enilemen .or re.und wa# more han :#.l,00,00,000-
%:#'+rore) #hould .ile monhly reurn#.
o 6ll oher dealer# #hould .ile ?uarerly reurn#.
Jilin$ and paymen dae# .or reurn-+um-+halan are a# .ollow#!
Return Frequency Filing / Payment date
Monhly (' day# .rom he end o. he reurn period
Ruarerly (' day# .rom he end o. he reurn period
<i8 Monhly (' day# .rom he end o. he reurn period
Scrutiny of returns filed
-he reurn .iled by he dealer #hould be +orre+, +omplee, and #el.-+on#i#en in every
re#pe+. -he <ale# -a8 O..i+e will +he+; he reurn o en#ure ha here are no obviou# error#
in +on#i#en+ie# or +onradi+ion# in +al+ulaion#. 4. hi# +he+; reveal# di#+repan+ie#, hen he
dealerB# will be advi#ed and invied o #ubmi a .re#h reurn. -he deparmen will i##ue hi#
de.e+ noi+e wihin .our monh# o. re+eivin$ heir reurn. -hen hey #hould .ile heir .re#h
reurn wihin *0 day# o. he noi+e. 4. hey .ail o do #o, i will be deemed no o have .iled
he reurn wihin he ime allowed, and will #o liable o a penaly +har$e.
6 he #ame ime, a# he deparmen i##ue# he de.e+ noi+e, dealer# will be #en a O#how
+au#eO noi+e, e8plainin$ ha a penaly may be impo#ed.
Offences relating to filing of returns and payment of tax
-he .ollowin$ are he o..en+e# liable .or inere# " penaly " pro#e+uion e+.
<hor- paymen " non- paymen o. a8 due
Jailure o .ile reurn#
9elay in .ilin$ reurn#
5nowin$ly .urni#hin$ .al#e reurn#
Jilin$ o. in+orre+ or in+omplee or in+on#i#en reurn#
Consequences for filing a return, which is not correct, complete and self-consistent
7a+h o. he reurn# .iled by hem i# +he+;ed o +on.irm ha he #ame i# +orre+, +omplee
and #el.-+on#i#en. 4n +a#e he reurn i# de.e+ive, a de.e+ noi+e i# i##ued by he :eurn#
Kran+h poinin$ ou he error or he omi##ion. On re+eip o. he noi+e, i i# re?uired o .ile
.re#h reurn whi+h i# +orre+, +omplee and #el.-+on#i#en and #hould al#o pay di..erenial
a8 due, i. any.
-he reurn .iled by hem in re#pon#e o de.e+ noi+e i# ermed a# Jre#h :eurn and he dealer
#hould indi+ae #o on he reurn in he #pa+e provided .or he #ame.
Jre#h reurn re+i.yin$ he de.e+# ha# o be .iled wihin he ime limi #pe+i.ied in he de.e+
noi+e. Jailure o +omply wih he noi+e would be +on#rued a# non-.ilin$ o. reurn and
+on#e?uenly, a unilateral (ex-parte) assessment order would be passed.
Failure to file a return
4. dealerB# .ail# o .ile a reurn wihin he ime allowed, hen hey are +ommiin$ an o..en+e
and, in addiion o any a8 and inere# ha may be due, whi+h i# liable o a penaly.
6# no reurn ha# been .iled by hem, a unilaeral a##e##men wihou $ivin$ hem a noi+e
will be made. -hi# unilaeral a##e##men order i# non-appealable. However, hey +an $e hi#
a##e##men order +an+elled only by .ilin$ he reurn and payin$ he a8 and inere# due a#
per he reurn. Jor hi# purpo#e hey #hould .ile appli+aion in Jorm *04 and #ubmi o
:eurn# Kran+h.
Paying the tax due
6ll he dealerB# or he per#on mu# .ile heir reurn and #hould pay he a8 due, in a ban; ha
i# auhori@ed o a++ep he reurn. 4. hey are re?uired o .ile a revi#ed reurn, and he a8 due
e8+eed# he amoun whi+h hey had paid when #ubmied earlier .orm, hen hey #hould pay
he balan+e amoun whi+h i# due now.
-he ban; will $ive hem an a+;nowled$emen o. he re+eip o. heir reurn and paymen. 4.
here i# any doub ha where o .ile he reurn and pay he a8 due, hen +an a#; o heir lo+al
#ale# a8 o..i+e.
Revised return
<ub#e?uen o .ilin$ he reurn, in +a#e dealer noi+e# any error or omi##ion, hen hey +an
.ile a revi#ed reurn be.ore e8piry o. ei$h monh# .rom he end o. he .inan+ial year o whi+h
he reurn relae# or be.ore a noi+e .or a##e##men i# #erved, whi+hever i# earlier. <u+h
reurn #hould be a++ompanied by paymen o. a8 and inere#, i. any. 4n +a#e he reurn .iled
by hem i# a revi#ed reurn, hen hey #hould indi+ae i on he reurn .orm in he #pa+e
provided .or he #ame.
-he variou# ype# o. reurn# and heir de#+ripion have been #ummari#ed a# under!
Type Of
Return
Description
Ori$inal -he reurn .iled by he dealer ori$inally alon$ wih he paymen in he
ban;.
Jre#h -he reurn .iled by he dealer a.er he deparmen i##ue# a de.e+
noi+e.
:evi#ed -he reurn .iled by hem o +orre+ any error or omi##ion.
Filing of returns in special cases
-he .ir# reurn .or he newly re$i#ered dealer i# .or he period up o he end o. he ?uarer
+onainin$ he dae o. i# re$i#raion.
Example 1
-he urnover e8+eed# he hre#hold on '# Covember. -hen hey #hould apply .or
re$i#raion, whi+h i# $raned on *0h Covember and he dae o. e..e+ i# '# Covember. -he
.ir# reurn i# .or he ?uarer ended *'# 9e+ember +overin$ he period '#, 6pril o *'#
9e+emberM and he #e+ond reurn i# .or he ?uarer endin$ .ollowin$ *'# Mar+h.
Example 2
4. urnover e8+eed# he hre#hold on '# Covember. Ku dealer apply lae .or re$i#raion i.e.
on '0h 9e+ember, and he re$i#raion i# $raned on l0h 9e+ember, hen he dae o. e..e+
re$i#raion i# '0h 9e+ember i.e., 9ae o. appli+aion. -he .ir# reurn i# due .or he ?uarer
endin$ on *'# 9e+ember %+overin$. he period '0h 9e+ember o *'# 9e+ember). .
Filing of return in case of cancellation of registration
9ealerB# re$i#raion may be +an+elled i. hey di#+oninue, ran#.er or #ell he bu#ine##. -hey
may al#o +hoo#e o +an+el heir re$i#raion i. heir urnover .all# below he hre#hold limi.
Example
4. dealerB# .ile he reurn# ?uarerly and heir, la# reurn wa# .or he ?uarer endin$ *0h
<epember. 4. a dealer +lo#e# he bu#ine## on 'Dh Covember, hen heir .inal reurn will be
.or, he period '# O+ober o 'Dh Covember. -he reurn #hould be .iled wihin one monh,
ha i#, be.ore 'Dh 9e+ember.
Dealer under the Package Scheme of Incentives
4. dealerB# hold a 2eri.i+ae o. 7nilemen $ranin$ an e8empion .rom paymen o. a8 or
de.ermen o. paymen o. a8, i #hould be .or he uni whi+h i# eli$ible .or he in+enive#, .ile
a ?uarerly reurn, in Form 224. -hey mu# +oninue o .ile ?uarerly reurn ill he
2eri.i+ae o. 7nilemen remain# valid.
>hen he validiy o. he 2eri.i+ae o. 7nilemen end#, hen dealer mu# .ile! -
a ?uarerly reurn, in form 224, .or he period .rom he .ir# day o. he ?uarer in
whi+h he even o++ur# o he dae he 2eri.i+ae o. 7nilemen +ea#e#, and
a ?uarerly reurn, in form 221 or 222 or 223 a# he +a#e may be, .or he remainder
o. ha .inan+ial year. Jor #u++eedin$ year#, he period and .re?uen+y o. he reurn#
will be deermined on he ba#i# o. he a8 liabiliy or enilemen .or re.und o. he
pre+edin$ .inan+ial year.
Filing multiple returns
9ealer# are re?uired o .ile a #in$le reurn a i# prin+ipal pla+e o. bu#ine## .or all i#
bu#ine##e# or pla+e# o. bu#ine##. 4. hey de#ire o .ile #eparae reurn# .or #eparae pla+e# "
divi#ion#, hen hey mu# apply .or Form 211 .or permi##ion o .ile muliple reurn#. 9ealer
#hould en#ure ha +orre+, +omplee and #el.-+on#i#en reurn# are .iled a all he lo+aion# in
he <ae.
Tax deduction at source by an employer in a works contract
-he wor;# +onra+or i# obli$ed o pay he a8 on he wor;# +onra+# e8e+ued by him.
However, he employer i.e. he noi.ied per#on who ha# en$a$ed he wor;# +onra+or i#
obli$ed o dedu+ a8 a he #pe+i.ied rae .rom he amoun payable o he wor;# +onra+or,
e8+ludin$ he amoun o. a8, i. any, #eparaely +har$ed or #ervi+e a8 levied by he
+onra+or.. -he a8 amoun #o dedu+ed and paid o he Governmen rea#ury 4< +on#idered
a# a paymen made on behal. o. he wor;# +onra+or.
-he employer i# re?uired o depo#i hi# a8 and i##ue a +eri.i+ae o. a8 dedu+ion a #our+e
in he pre#+ribed .orma ba#ed on whi+h he wor;# +onra+or i# allowed o a;e he +redi o.
he #ame while di#+har$in$ hi# a8 liabiliy.
Part 6 - Records and accounts
Keeping records
Proper re+ord# are an e##enial par o. e..e+ive mana$emen and +onrol o. heir bu#ine##.
9ealer# are re?uired by law o ;eep a rue and a++urae a++oun o. he ran#a+ion# e..e+ed
by hem. -hi# will al#o help hem o +orre+ly ?uani.y heir a8 liabiliy or re.und#, a# he
+a#e may be.
-hey #hould ;eep all heir a++oun#, re$i#er# and do+umen# relain$ o heir #o+;# o.
$ood#, pur+ha#e#, #ale# and deliverie# o. $ood#, a heir pla+e o. bu#ine##. 4. hey wi#h o
;eep hem a a di..eren lo+aion hey may do #o, bu only i. hey have he permi##ion o. he
2ommi##ioner o. <ale# -a8.
Nature of records
Cormally, hi# deparmen will no e8pe+ hem o ;eep any #pe+ial re+ord# .or V6-
purpo#e#. However, he re+ord# ha hey do ;eep #hould have #u..i+ien deail# o enable
hem o +orre+ly +al+ulae he amoun o. V6- due .or paymen and .ile heir reurn.
4. <ale# -a8 O..i+e happen# o .ind ha heir re+ord# are no properly mainained, hen hey
will i##ue a noi+e, in.ormin$ dealer# abou wha re+ord# hey mu# ;eep.
6 dealer #hould mainain he .ollowin$ re+ord#! -
o ideni.y he naure and value o. $ood# pur+ha#ed and #oldM
di#in$ui#h beween -
o lo+al #ale#, iner#ae #ale# N e8por#.
o lo+al pur+ha#e#, iner#ae pur+ha#e N impor#.
indi+ae value o. -
o #ale and pur+ha#e o. a8 .ree $ood#.
o #ale# e8emped .rom a8.
o pur+ha#e# .rom =:9.
o rae-wi#e pur+ha#e# N #ale#.
o lo+al pur+ha#e# .rom re$i#ered dealer wih V6- #hown #eparaely.
re+ord paymen# .or he pur+ha#e# and #ale o. $ood# in +a#h boo; " ban; boo;.
in+lude a #ummary o. V6- paid #eparaely on pur+ha#e#, V6- +har$ed on #ale#,
V6- paid o he <ae rea#ury and V6- re.undable " re.unded o he dealer#.
+onain ade?uae proo. ha $ood# have been e8pored or imporedM
be #uppored by invoi+e# .or all $ood# pur+ha#ed, and +opie# o. invoi+e#, and bill# or
+a#h memoranda, i##ued .or $ood# #old.
Tax invoices and memoranda of sales or purchases
6# a re$i#ered dealer, hey #hould i##ue a a8 invoi+e when hey #ell $ood# o anoher
re$i#ered dealer and +har$e V6-. Jor #ale# made o +on#umer# and unre$i#ered dealer#,
hey mu# i##ue a a8 invoi+e, or a bill or +a#h memorandum. However, i. a dealer i# a
+ompo#iion dealer oher han a wor;# +onra+or, hey mu# i##ue a bill or +a#h
memorandum only and no a a8 invoi+e. Jailure o i##ue a a8 invoi+e or a bill or +a#h
memorandum may re#ul in a penaly.
-he a8 invoi+e mu# +onain! -
he word# O-a8 invoi+eO, prined in bold leer# a he op or a a prominen pla+eM
dealer# name, addre## and re$i#raion number %-4C).
he name, addre## and he re$i#raion number o. he pur+ha#erM
#erial number o. he invoi+eM
dae o. i##ueM
de#+ripion o. he $ood#, he ?uaniy and pri+e o. he $ood# #oldM
rae and he amoun o. he a8 +har$ed and indi+aed #eparaelyM
pre#+ribed de+laraion re$ardin$ validiy o. he re$i#raion and paymen o. a8M
6nd i mu# al#o be #i$ned eiher by dealer or by #omeone who i# auhori@ed by he dealer.
4. a dealer i##ue# a bill or +a#h memorandum, i mu# +onain! -
word# OKill " +a#h memorandumO, prined in bold leer# a he op or a a prominen
pla+eM
i. a dealer i# Oa +ompo#iion dealer %oher hen wor;# +onra+or) hen he word#
2ompo#iion 9ealer a he op o. he bill " +a#h memorandumM
dealer# name, addre## and re$i#raion number %-4C)M
he name and addre## o. he pur+ha#erM
#erial number o. he bill " +a#h memorandumM
dae o. i##ueM
de#+ripion o. he $ood#, he ?uaniy and pri+e o. he $ood# #oldM
pre#+ribed de+laraionO re$ardin$ validiy o. he re$i#raion and paymen o. a8M
6nd i mu# al#o be #i$ned eiher by dealer or by #omeone who i# auhori@ed by he dealer.
Retention of records
6 dealer mu# ;eep all heir re+ord# in+ludin$ a8 invoi+e# " bill " +a#h memorandum,
relain$ o heir #o+; o. $ood#, pur+ha#e#, #ale#, deliverie# and paymen# made or re+eived
.or he pur+ha#e or #ale o. $ood# .or a minimum o. .ive year# .rom he end o. he year o
whi+h hey relae.
However, in +a#e any le$al pro+eedin$# are pendin$M he re+ord# perainin$ o ha period
#hould be reained ill he pro+eedin$# rea+h .inaliy.
Independent audit of accounts by a Chartered Accountant
4. dealer#B annual urnover o. #ale# e8+eed# :#.40la;h#, or i. hey hold a li+en#e .or he
manu.a+ure or #ale o. li?uor, hen hey mu# have heir boo;# o. a++oun# audied by a
pra+i+in$ +harered a++ounan.
-he 2harered 6++ounanO# audi repor, o be made on Jorm 704 and i mu# be #ubmied
wihin F monh# .rom he end o. he .inan+ial year. 4. hey .ail o #ubmi he audi repor o
he <ale# -a8 9eparmen wihin he pre#+ribed ime, hen hey may be liable o a penaly.
Production and inspection of accounts and documents
4. he +on+erned #ale# a8 auhoriie# have rea#on o believe ha here may have been
aemp# o evade he paymen o. a8, hey may re?uire dealer o produ+e all heir boo;# o.
a++oun#.
4. a dealer .ail# o +omply wih #u+h a re?uiremen, i may +ommi an o..en+e and will be
liable o a penaly.

Part 7 - Business Audit
Ku#ine## 6udi i# a new .un+ion o. he <ale# -a8 9eparmen. -hi# will be +ondu+ed by he
<ale# a8 o..i+ial# ordinarily a he dealerO# pla+e o. bu#ine##. -hi# audi i# independen .rom
he audi by a 2harered 6++ounan. Ku#ine## 6udi i# however, no an a+iviy o.
en.or+emen .or #ear+h and #ei@ure a dealer#O bu#ine## premi#e#.
Objectives of Business Audit
-he ob/e+ive o. a Ku#ine## audi i# o +lo#e any po##ible $ap beween he a8 de+lared byO a
dealer and he a8 le$ally due. 4 aim# o en#ure opimum revenue +olle+ion and volunary
+omplian+e. -he aim o. Ku#ine## audi i# o en+oura$e he hi$he# po##ible level o. volunary
+omplian+e in a #y#em o. #el.-a##e##men.
Selection for audit
-he main purpo#e o. an audi i# o en#ure a8 +omplian+e, +ro## +he+; o. ran#a+ion# and
iniiae +orre+ive a+ion#, i. ne+e##ary. -he reurn# .iled by he dealer# will be e8amined .or
di#+repan+ie#. Ka#ed on #u+h e8aminaion and pre-deermined +rieria, #ome dealer# will be
#ele+ed .or audi. Generally, +a#e# #ele+ed .or audi will in+lude ho#e dealer# 3
who .ile i# reurn# lae
in who#e +a#e hey have rea#on o believe ha he reurn may no be +orre+ or a
deailed #+ruiny i# ne+e##ary
+ho#en randomly, on he ba#i# o. +erain +rieria.
6 dealer who +on#i#enly and re$ularly +omplie# wih he V6- law and .ile# +orre+,
+omplee and #el. +on#i#en reurn# will normally no be #ele+ed .or audi. -he #ele+ion o.
audi +a#e# will be by e8+epion raher han a# a rule.
The Business Audit Process
4. any o. he dealer# bu#ine## i# #ele+ed .or an audi, hen <ale# -a8 O..i+e will in.orm hem
and hen .i8 a #uiable dae.
-he audi o..i+er will in#pe+ he boo;# o. a++oun# and #upporin$ do+umen#. 6 ha ime
dealer #hould ma;e available any in.ormaion or do+umen# ha he may re?uire o enable
him o +arry ou he audi e..e+ively and #peedily.
-he audi o..i+er may li;e o under#and dealerB# bu#ine## pro+e## and e8amine heir #o+;#
o. $ood#. He may al#o li;e o inerview he per#on or i# employee# .or hi#.
-he audi o..i+er +anno remove any boo;# o. a++oun# or do+umen# .rom heir premi#e#.
However, audi o..i+er +an re?ue# .or +opie#.
Results of the audit
4. he audi #how# ha he reurn# .iled do no re.le+ he rue pi+ure o. he dealer# bu#ine##,
hen he audior may di#+u## he maer wih he dealer and will $ive $uidan+e o hem o
preven re+urren+e and will al#o e8plain hem abou wha a+ion #hould be .ollowed. -he
audi may re#ul in addiional a8 demand or a re.und.
Additional tax demand
4. any addiional a8 i# due, he audior will i##ue a noi+e e8plainin$ he addiional demand.
4. he dealer a++ep# he addiional demand #hown, hen hey #hould .ile a revi#ed reurn
alon$-wih he paymen o. a8.
However, i. he dealer di#a$ree# wih he .indin$# o. he audior, hen hey may pro+eed o
a##e## heir +a#e and i##ue an a##e##men order unle## hey are able o provide eviden+e and
+onvin+e he audi o..i+er no o a##e## hem .or addiional demand. -he a##e##men order
will al#o in+lude inere# due .rom he dae hey #hould have paid he a8 o he dae o. he
a##e##men. 4n addiion, hey may al#o impo#e a penaly. -hey #hould pay he due# a# per he
a##e##men order or hey may pre.er an appeal a$ain# hi# order.

Time limit for audit
-here i# no ime limi pre#+ribed .or +ondu+in$ Ku#ine## 6udi. Cormally, hey may +arry
ou an audi wihin wo year# o. .ilin$ he reurn. -hey may .ollow he imeline# a#
pre#+ribed .or +ompleion o. a##e##men# under he MV6- 6+ and MV6- :ule#.
Investigation
Cormally, he <ale# -a8 9eparmen will ma;e Ku#ine## 6udi vi#i# by appoinmen.
However, i. he deparmen #u#pe+# any a8 eva#ion, i may +ondu+ inve#i$aion o. he
bu#ine## in+ludin$ #ear+h and #ei@ure operaion# a any ime wihou $ivin$ noi+e. <u+h
inve#i$aion will be +arried ou by a duly auhori@ed inve#i$aion o..i+er %no audi o..i+er).
Appendix 1
Ai# o. imporan .orm# re.erred o in he Guide
Sr.
No.
Form
Number
Subject
' '0' 6ppli+aion .or :e$i#raion under he MV 6- 6+, (00(.
( '0* 6ppli+aion .or +an+ellaion o. :e$i#raion 2eri.i+ae.
* ('0 2halan in re#pe+ o. paymen made oherwi#e han wih reurn by a
dealer under he MV6- 6+, (00(
4 ((' :eurn-+um-+halan .or all V6- dealer# oher han dealer# e8e+uin$
wor;# +onra+, dealer# en$a$ed in lea#in$ bu#ine##, +ompo#iion
dealer# %in+ludin$ dealer# opin$ .or +ompo#iion only .or par o. he
a+iviy o. he bu#ine##), P<4 dealer# and noi.ied Oil 2ompanie#.
D ((( :eurn-+um-+halan .or all +ompo#iion dealer# who#e enire urnover
i# under +ompo#iion %e8+ludin$ wor;# +onra+or# opin$ .or
+ompo#iion and dealer# opin$ .or +ompo#iion only .or par o. he
a+iviy o. he bu#ine##).
6 ((* :eurn-+um-+halan .or V6- dealer# who are al#o in he bu#ine## o.
e8e+uin$ wor;# +onra+#, lea#in$ and dealer# opin$ .or +ompo#iion
only .or par o. he a+iviy o. he bu#ine##.
7 ((4 :eurn-+um-+halan .or P<4 dealer# holdin$ 7nilemen 2eri.i+ae.
%-ran#a+ion# by P<4 dealer# relain$ o he bu#ine## o. e8e+uion o.
wor;# +onra+#, lea#in$, radin$ and +ompo#iion only .or par o. he
a+iviy o. he bu#ine## o be in+luded in a #eparae reurn in Jorm
((*).
F ((D :eurn-+um-+halan .or Coi.ied Oil 2ompanie#. %-ran#a+ion# by
O4A 2ompanie# relain$ o he bu#ine## o. e8e+uion o. wor;#
+onra+#, lea#in$ and +ompo#iion only .or par o. he a+iviy o. he
bu#ine##, o be in+'uded in a #eparae reurn in Jorm ((*).
& *04 6ppli+aion .or +an+ellaion o. a##e##men order under #e+ion %') o.
#e+ion (* o. he Mahara#hra Value 6dded -a8 6+, (00(.
'0 *'0 6ppeal a$ain# an order o. a##e##men, inere#, penaly or .ine.
'' *'' 6ppli+aion .or $ran o. #ay a$ain# order o. a##e##men, penaly,
inere# or .ine
'( 4'4 6ppli+aion .or a8 +learan+e +eri.i+ae.
'* D0' 6ppli+aion .or re.und under #ub-#e+ion %') o. #e+ion D' o. he
Mahara#hra Value 6dded -a8 6+, (00(.
'4 704 6udi repor under #e+ion 6' o. he Mahara#hra Value 6dded -a8
6+, (00(.
List of Sales Tax Offices in the State of Maharashtra
-here are oal 40 Sales Tax Office lo+aed all over he Mahara#hra. Ou whi+h #ome o.
hem are in! Mumbai %Head Ruarer#), Kandra, :ai$ad %9ivi#ion), -hane %9ivi#ion),
5alyan, Cala#opara, Pal$har, Pune %9ivi#ion), <olapur, 5olhapur %9ivi#ion), <aara, <an$li,
:ana$iri, Ca#i; %9ivi#ion), 6hmedna$ar, 6uran$abad %9ivi#ion), Ca$pur %9ivi#ion),
>ardha, 6maravai %9ivi#ion), 6;ola, and many moreS
Conclusion
Bibliography
1. Value Added Tax - By Sales Tax Department.
2. www.google.com
3. www.tax4india.com
4. www.vat.maharashtra.gov.in