Value Added Tax – Introduction (AP Vat)

1.  Registration

1. Every dealer whose turnover is more than Rs.40 lakhs in last 12 months or more than Rs. 10 lakhs in last 3 months.
2. For dealers whose turnover is less than Rs. 40 lakhs and above Rs. 5 lakhs in the last 12 months no fresh registration is required, existing APGST number will apply. Tax liability @1 % on total turnover no input tax credit is allowed.
3. For dealers whose turnover is less than Rs. 5 lakhs, they need not apply for registration and no tax liability.
4. For dealers carrying on business in exempted goods. Like Sugar, Cloth, Tobacco Products, Poultry Feed, Maize etc.,
5. Registration is required only, if a dealer is carrying on business in taxable goods.

 2.  Rates of Taxes

1. There are three rates of taxes that is @ 1 %, 4 % and 12 ½ % for dealers registered under VAT.
2. For dealers below Rs. 40 lakhs, above Rs. 5 lakhs the Tax Liability @ 1 % on taxable turnover and no input tax credit.
3. For dealers whose turnover below Rs. 5 lakhs no tax liability.
4. Tax can be collected from the purchaser separately or can be included in the sale price.

3.  Records

1. Every VAT dealer has to maintain the following records.
   i) VAT Account
   ii) Purchase Records and Documents in date wise order.
   iii) Sales Records maintained in date wise order.
   iv) Credit Note issued.
   v) Debit Note received.
   vi) Records for Export Turnover.
   vii) Cash Book, General Ledger.
   The above records has to be maintained at least for 6 years after the period for which those are related.
2. Records maintained by the Retailer
   i) Sales to Non- VAT dealers, Consumers.
   ii) Day wise Sales Turnover with accumulate totals.
   iii) Sales amount and VAT collected amount records separately maintained.

4.  Returns to be Filed

1. VAT dealer has to file his return for the month within 20 days after the tax period in Form No: VAT 200.
2. For dealers of TOT, they has to file return quarterly in Form No: TOT 007 within 30 days after the end of calendar quarter.

5.  Enclosures

1. Every VAT dealer has to enclose a Challan for payment of VAT along with the return.
2. The Form VAT 200 which enclosed 25 boxes should be filled with the particulars or mentioned as in case of nil / Non-applicability.
3. Every TOT dealer has to enclose a Challan for payment of TOT for the previous quarter along with TOT return.

 6.  Assessment

1. Every return is deemed to be self- Assessment and liable for re-Assessment within 6 years for willful evasion, 4 years for under determination of tax liability.
2. Where no return as filed unilateral Assessment based on registration rate and data based on the return file. The unilateral Assessment will be withdrawn when the return is filed.
3. Every return filed is subjected to scrutiny for verification of correctness of calculation, correct rate of tax, input tax credit claimed, payment of tax.

7.  Audit

There are three types of Audit namely General, Specific and Special Audit.

1. GENERAL AUDIT: – Every dealer has to be audited for every 2 or 3 years. For large tax payers that can be a shorter period. The audit depends upon the defects noticed in the past.
2. SPECIFIC AUDIT: – It is based on refunds, unusual refunds claimed and information from other Offices.
3. SPECIAL AUDIT: – It is mainly for fraud investigation and also may result from General or Specific Audit.

8.  Penalties

1. REGISTRATION: For not getting registration within the end of the month, the penalty is Rs. 5,000/- and increased to @ 25% of tax due without benefit of input tax credit after the end of the month and before the date of second month.
2. RETURNS:
   i) Rs. 2,500/- for VAT dealer for not filing return without in tax liability.
   ii) Rs. 500/- for TOT dealer for delay.
   iii) At the rate of 15 % of the tax due for other dealers.

c) Tax Payments:

        i.            At the rate of 10 % of the tax due where return is filed, @ 50 % of the Assessed Tax for unilateral Assessment.

      ii.            For others @ 15 % per month.

    iii.            For wrong computation of tax, the dealer has to pay a penalty @10 % of tax due and interest where there is a difference below @ 10 % and it is @ 25 % where the difference is more than @ !0% of the tax due.

    iv.            It is @ 100 % penalty and interest where there is willful and /or fraudulent tax computation.

      v.            No Penalty but only interest will be levied for correct calculations and non-payment of tax.

 d)  Others:

1. Rs. 1,000/- for misuse of T.I.N.
2. Rs. 5,000/- or 100 % tax due whichever is lower where VAT dealer fails issues tax invoice or cash memorandum.
3. At the rate of 300 % of tax on invoice where a VAT dealer issues false tax invoice or uses false invoice.
4. Rs. 250/- for TOT dealer who does not issue bill or cash memorandum.
5. Rs. 5,000/- each for not maintaining records from the second offence for every subsequent offence.
6. For collecting excess tax, the penalty @ 100% of so excess collected.
7. Rs. 3,000/- or @ 100% tax whichever is lower for a case of evasion of tax.
8. Up to Rs. 3,000/- in case of other evasion of tax offences.

9.  Prosecutions

        i.            The dealer who obstruct any authority from the department in performing their duties is liable conviction up to Rs.6,000/- and with fine.

For other offences not getting registration, wrong calculation of non-issue of sale invoices, non-filing of returns, for non-payment of arrears, for non-maintenance of documents and records. The conviction can be up to 3 months and for fine.