VAT AND SERVICE TAX - Very Urgent!

1. Unregistered Dealer can not sale his goods outside his state? -False he can only issue is he can't charge CST in his bill.
2. Service Tax is liable to pay only those firms whose annual service turnover value is more than 10 Lacs? True
3. Service Tax rate can be revised only by Finance Minister of India? True
4. Service Tax rates are equal to all services and every firm has right to have input credit of service tax? partial true. Servie tax rate is equal to all services, however abatement is there on few services. Input credit of service cannot be enjoyed by all firms. there are set of rules for this.

NIRMIT,

PLEASE READ WITH CAREFULLY OF YOUR QUERY AND ALSO LINK THE PATH:-

VAT:-

Registration:  All Importers, Manufacturers, Exporters and Dealers having CST registration would be required to seek mandatory registration under the new VAT Act. The existing registered dealers are required to fill a FACT SHEET as notified by the department within a stipulated time which is at present 15.02.2006 and then they would not be required to seek fresh registration. There would be two types of registration. The first is VAT dealers registration and the second is composition scheme dealer registration. The dealers opting under composition scheme would not be able to charge tax in the invoice and he would pay lump sum fee as composition amount. It is apparently for retail traders and the expected limit of turn over for option under composition scheme is maximum Rs. 15 lacs. 

Security Amount:  Security amount for seeking registration is likely to be increased many fold in VAT Act. The security for registration under the present Act is Rs.10, 000.00 which is likely to be increased to Rs. 25,000.00 for small scale industry, Rs. 1,00,000.00 for medium scale industry and Rs. 5,00,000.00 for large scale industry. Apart from it, the assessing authority would have a right to seek additional security equal to 25% of the tax liability. 

Audit of Account:  Every dealer having a turn over of over Rs. 40.00 lacs would be required to get his account audited by a Chartered Accountant and submit the audit report within the stipulated time. Failure to do so would attract penalty proceedings. 

Penalties: Penalties had been increased many folds in the new VAT Act. As per discussion draft on VAT Act circulated, there is more emphasis on penalties. 
Works Contract and Leasing: No clarification, provision or guide lines had been issued by the department till date on works contract and leasing transaction. The continuation of existing composition scheme or by what method they would be taxed in future has not been informed. 

Set off. ( Input Credit ): At present the set off would be available on the goods locally purchased within the State only. No set off would be available to the goods purchased in the course of inter state trade and commerce. It will be necessary to produce the tax invoice to claim set off. The tax should have been charged in the invoice. 
Exempted Goods: Some goods would be declared as exempted by the State Government under the proposed VAT Act. However the present view as per guide lines issued by the State Government are that no set off would be allowed on the exempted goods. It means that the tax suffered on the raw material for manufacture of exempted goods would not be refunded 

SERVICE TAX CAN BE REVISED ONLY FINANCE MINISTRY,

Updated upto August, 2008

CONTENTS

• Service Tax Rules, 1994

• Dispute Resolution Scheme Rules, 2008

• Service Tax (Provisional Attachment of Property) Rules, 2008

• The Service Tax (Publication of Names) Rules, 2008

• Export of Service Rules, 2005

• Taxation of Services (Provided from Outside India and Received in India) Rules, 2006

• Service Tax (Registration of Special Category of Persons) Rules, 2005

• Service Tax (Advance Rulings)  Rules, 2003

• Service Tax (Determination of Value) Rules, 2006

• Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007

 

What are the implications when a pvt ltd company pays the local dealer for contract of site devpt activities. He usages his JCB, tracktor, labour and other building materials for completing the contract. He neither have vat regn no. nor service tax no. Should a pvt ltd company ask from him vat & service tax no?