setoff or refund maharashtra vat

This query is : Resolved 

17 June 2009

Is it compulsory to claim refund of excess vat paid for the year 2008-09 & can it be carried forward to next year. If no what is procedure of claiming refund

Madhukar N Hiregange (Expert)
17 June 2009

In most states the carry forward of credit/ input deductions are allowed. You can utilise the same in the coming years.

CA CS CMA Srinivasan N (Expert)
17 June 2009

It depends upon the class of dealer you are as per the MVAT Rules. Please refer the guidelines below on Refund under MVAT:
Refund cases
If the amount of set-off admissible during the period is more than
the amount of tax payable, your return would reflect a balance
refundable to you. The amount of set-off can be more than the tax
payable for a variety of reasons, such as –
 Inputs are taxable at higher rate as compared with the rate of
tax on output.
 Outputs are tax-free goods while inputs carry tax.
 Outputs are export sales.
 Outputs are CST sales which are taxable at the concessional
rate of CST.
 Manufactured goods or trading goods are transferred to
branches outside the State or are sent on consignment
Apart from part of the admissible set-off which can remain unutilised,
excess credit can be on account of:
• unutilised portion of tax deducted at source or
• refund payment order or
• ad-hoc payment made is more than tax payable.
Whatever may be the reason for credit in excess of tax due and
payable during a tax period, you are eligible to claim refund of such
excess credit. For the purpose of granting refund, dealers have been
classified under two categories viz. a) specified class of dealers and
b) other dealers.
Refund to specified class of dealers
Specified class of dealers are –
• Exporters exporting out of the country or dealers selling to an
exporter against form H.
• A unit set-up in SEZ or STP or EHTP or a 100% EOU unit.
These units have to be certified by the Commissioner of Sales
• An Entitlement Certificate holder availing of the benefit of
incentives under the Package Scheme of Incentives (PSI).
Specified class of dealers and the dealers who have made a sale in
the course of inter-State trade or commerce and in the return he has
shown any amount to be refundable are eligible to claim refund in
each of the returns filed by them. Full amount of excess credit can
be claimed as refund due for the return period.
The dealer eligible to claim refund has to file refund application in
Form 501. The application has to be filed with the Refund Branch.
The Refund Branch may ask for Bank Guarantee and any relevant
information for checking correctness of refund claimed. Normally,
refund would be granted within one month from the receipt of Bank
Guarantee or within three months from the date of receipt of refund
application in Form 501, or as the case may be, the date of recipt of
the additional information, whichever is later.
Refund to other dealers
Other dealers are not eligible to get refund in each of the return
filed. They are required to carry forward excess credit to the next
return within the same financial year and claim refund of excess
credit in the return for the period ending March.
The dealer claiming refund in March return has to make refund
application in Form 501. The application has to be filed with the
Refund Section. Normally, refund would be granted within six
months of the end of the year to which the return relates. However,
if you are a newly registered dealer, refund would be granted within
six months of the end of the year succeeding the said year.

For full MVAT Guide refer this link


Shraddha (Querist)
17 June 2009

Thanks 4 ur advice I want to further ask you whether the refund in march can be carried forward to next year. If not can a refund for a/c year 2008-09 be claimed now

CA Nitin Wadhwani (Expert)
17 June 2009

It cannot be carried forward.
You will have to claim refund by filing an application in Form.501.

Shraddha (Querist)
19 June 2009


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