Regarding audit under mvat act
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 April 2013
Hello Friends,
Please help me out of MVAT Act.
Is that compulsory to audit books under MVAT Act if there is no taxable sales. But having taxable purchases? And turnover of sale is 2 crore which is taxfree under MVAT Act. And a dealer having registered Under MVAT. Is he is liable to file Vat returns or not?
Please reply my query as early as possible.
Thanks in advance
Please help me out of MVAT Act.
Is that compulsory to audit books under MVAT Act if there is no taxable sales. But having taxable purchases? And turnover of sale is 2 crore which is taxfree under MVAT Act. And a dealer having registered Under MVAT. Is he is liable to file Vat returns or not?
Please reply my query as early as possible.
Thanks in advance
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 June 2013
Please answer my question it is urgent.
20 July 2025
Here's a clear answer to your MVAT (Maharashtra Value Added Tax) audit and return filing query:
1. Is audit compulsory under MVAT if there are no taxable sales but taxable purchases exist?
Under MVAT Act, audit is mandatory if your turnover (total sales) exceeds the prescribed limit (usually ₹1 crore or as notified).
In your case, the turnover is ₹2 crore (even if sales are tax-free, total turnover includes both taxable and exempt sales).
Taxable purchases alone don’t trigger audit — it's the total turnover that matters.
So, since your turnover exceeds ₹1 crore, audit is compulsory, even if no taxable sales were made.
The dealer should get their accounts audited and file the audit report (Form 704) with the VAT return.
2. Is a dealer with tax-free sales but registered under MVAT liable to file VAT returns?
Yes, if you are registered under MVAT, you are liable to file VAT returns regularly, irrespective of whether your sales are taxable or exempt.
Returns must show details of all sales (taxable and exempt) and purchases.
Even with zero tax liability, returns should be filed on time to avoid penalties.
1. Is audit compulsory under MVAT if there are no taxable sales but taxable purchases exist?
Under MVAT Act, audit is mandatory if your turnover (total sales) exceeds the prescribed limit (usually ₹1 crore or as notified).
In your case, the turnover is ₹2 crore (even if sales are tax-free, total turnover includes both taxable and exempt sales).
Taxable purchases alone don’t trigger audit — it's the total turnover that matters.
So, since your turnover exceeds ₹1 crore, audit is compulsory, even if no taxable sales were made.
The dealer should get their accounts audited and file the audit report (Form 704) with the VAT return.
2. Is a dealer with tax-free sales but registered under MVAT liable to file VAT returns?
Yes, if you are registered under MVAT, you are liable to file VAT returns regularly, irrespective of whether your sales are taxable or exempt.
Returns must show details of all sales (taxable and exempt) and purchases.
Even with zero tax liability, returns should be filed on time to avoid penalties.
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