How to disallow vat payable not paid before due date.

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CA IN PRACTICE...

248 Points Posted on 21 October 2012

Dear Friends & Experts,

One new client is approaching me to conduct tax audit for 2012-13 . On verification of his books i found he has not followed various norms but his CA has allowed it . For eg:- Vat payable as on 31:3:2011 is not paid till 30 sept 2011 but allowed u/s 43b and same case in this year also ie Vat payable as on 31:03:2012(including that of opening of last year is also not paid till 30th sept 2012 but his previous CA has not mentioned it in audit report and also allowed the same.

My query is that if it is paid in Oct 2012 what will be treatment and what should be its treatment in previous years.

i also want to know whether 43b applies in case of VAT payable.

Thanks.

Replies (2)

Pawan Mittal

CA Final

444 Points Posted on 23 October 2012

Your client will have to pay interest.

Saket Sinha

Student

155 Points Posted on 23 October 2012

Sec43B applies to VAT i.e deduction will be allowed on payment basis. Asper your query, deduction of VAT has been given on due basis rather on payment basis. For the previous years where deduction has already been given as an auditor u cant don any thing for previous years but for current year 2012-13 , VAT deduction must allowed only on payment basis.Also for current year2012-13,for the deduction to be allowed , the date of payment of VAT wiil be on or before due date of filing of return of income i.e Sept30,2014

All the irregularities for the previous year will be the responsibility of previous auditor. However you should make adequate disclosures in Form 3cd .for the current year.