Vat query for karnataka State

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irfan (Querist)
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03 August 2017 we have purchase material from banglore vendor on 24 March 2017 at CST 14.5% But at the time finalisation of order we agree that we will pay 2% against c form Question is billing is done in march and current month is Aug. If i am asking client to raise the revise invoice and do the revise return but client tell us that revise return is not possible. Kindly give suggestions revise return can be possible in karnataka if yes what is procedure can we go 14.5% to 2% tax regime

irfan

irfan (Querist)
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03 August 2017 Our company in Maharashtra.
Kindly provide any document that show revise return in Karnataka is possible.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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03 August 2025 You're dealing with a **CST billing mismatch issue** between a **Karnataka-based vendor** and your company in **Maharashtra**, involving a transaction dated **24 March 2017**, just before the **implementation of GST on 1 July 2017**.

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### 🧾 Summary of the Issue:

* **Invoice Date:** 24 March 2017
* **Tax Charged:** CST @ 14.5%
* **Agreed CST Rate:** 2% against C Form
* **You are requesting:**

* A **revised invoice** reflecting 2% CST
* A **revised VAT/CST return** by the Karnataka vendor
* **Vendor says:** They cannot file a revised return in Karnataka.

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### ✅ Legal Position in Karnataka (under **KVAT Act**, 2003):

Yes, **filing a revised return** was **allowed** under the Karnataka VAT Act, subject to conditions.

#### 📌 Relevant Rule:

**Section 35(4) of the KVAT Act, 2003:**

> “If any dealer finds any omission or incorrect statement in any return furnished by him, he may furnish a revised return **before the last date for filing return for the succeeding tax period**.”

### ❗ In Your Case:

* The original return would have been for **March 2017**.
* The **last date to revise** it would have been **before 20 April 2017** (i.e., before the due date of the next period's return).
* Since you're asking in **August 2017**, **filing a revised return was NOT allowed** at that point.

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### 📌 Key Points:

| Action | Possible in August 2017? | Notes |
| --------------------------- | ------------------------ | ----------------------------- |
| Issue a revised invoice | ✅ Possible | But must match return details |
| File revised VAT/CST return | ❌ **Not allowed** | Outside time limit under KVAT |
| Credit/Refund Adjustment | ❌ Not automatic | CST is **origin-based** tax |

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### ✅ Suggested Practical Workaround (if still relevant historically):

1. **Get Credit Note from Vendor**: For the differential CST (14.5% – 2% = 12.5%)
2. **Vendor Books Adjustment**: Internally in accounts, but **cannot reflect it in VAT return**
3. **Declaration with C Form**: You can still issue the **C Form** for the transaction.
4. **Vendor Bears Loss or Adjusts**: Commercial understanding—depends on your agreement.

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### 📄 Supporting Document:

You can refer to:

> **Rule 138 of KVAT Rules, 2005** + **Section 35(4) of KVAT Act, 2003**
> These outline the time limits and conditions for filing **revised returns**.

---

Would you like me to fetch an archived or scanned official copy of the **KVAT rules** for your record or audit file?

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