KVAT return filing

Originally posted by : Giri
	Dear Sir/s,  I have query with regard to KVAT return filing, one of my Clint is having Madical Shop and he has not paid tax and filed his Quarterly returns VAT 100 for last 4 Quarters. I would request any one of you to advice me what is the rate of Interest on late payment and is there any penalty for non filing of return for 4 quarters. Pl. guide me how to go about on this.

 Best Solution :

Speak to your area VAT inspector and settle the issue

Prpare  returns for all the quarters and work out the tax liabiilty. Pay the tax as per return and issue a separate cheque for the interest calculated at the rate of  1.25% per month, calculated from the due date of return to till the date of filing. Interest for the part of the  month is to be calculated proportionately. Earlier there was provision for penaly calculated at 10% of the tax amount. As per the recent judgement of the honourable Karnataka High Court, if you file the return voluntarily, the VAT officer can not demand the penalty.  But, interest is mandatory.

Therefore, don't wait for the notice from the department. Go and file the return at your earliest.

We are a Business Entity setting up facilities for Training of Pilots.  We are yet to start our commercial operations and our civil constructions are underway.  When we start our operations we will not be paying any VAT on our operatiions since the same is considered as service.  Presently we are filing nil returns 

Our Capital Account Vendors have been charging K VAT in thier bills which forms part of our capital budget.

Are we required to report all the purchases in the K VAT returns eventhough we have not taken any input credit on them?