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New Format for refund of VAT to Big Dealers under MVAT



Office of the,

Commissioner of Sales Tax,

Maharashtra State, Mumbai,

8th Floor, Vikrikar Bhavan,

Mazgaon, Mumbai- 400010

TRADE CIRCULAR

No. :-VAT/Refund/2008-09/B-223 Mumbai - Dt : 23.05.2008

Trade Circular No. 19 T of 2008

Sub: - Grant of refund claim under MVAT Act to specified category of dealers.

1.INTRODUCTION:-

This office had earlier issueda Trade Circular No. 56 T of 2007 Dt. 23.08.2007. The circular laid down the procedure to be followed for grant of refund. Some dealers, in whose cases the net worth of business is substantial, have continuous and large claims of refund. Apart from this, the dealers having major exports and those with extensive distribution network all over India also claim large refunds respectively.

Some of such dealers have submitted a representation for fast processing of their refund claims. Considering the track record of such dealers, it is decided to develop a scheme for grant of quick and pre-audit refunds to them. The following guidelines are now notified. It may be noted that this is a voluntary scheme. The dealer may voluntarily avail the benefits of this Trade Circular, and if he is eligible in terms of this circular and if he complies with the conditions laid down in this circular, then the refunds in his case will be granted as provided herein. This Trade Circular applies only for refund claims in respect of periods starting on or after 1st April, 2008.

2.APPLICABILITY OF CIRCULAR: -

The scheme for refunds under this Trade Circular will be applicable to only those registered dealers, who fulfill the following conditions: -

i.Their net worth is Rs. 100 Crore or more, and

ii.At least one Refund Audit is completed in respect of any of the years ending prior to 1st April, 2008 and the differential demand, if any, in respect of that year does not exceed 1% of the claim and

iii.Refund claim in respect of the immediately preceding year is of Rs. 100 crore or more

iv.The claim for refund in respect of any year does not exceed by an amount more than 20% of the claim for the immediately preceding year.

3.CONDITIONS OF ELIGIBILITY :-

i.The net worth of the business of the claimant dealer for the latest year for which accounts have been finalized and audited should be more than Rs. 100 Crore. The formula for calculating the net worth is shown in Annexure-1 , to this circular. It is to be applied to calculate the net worth of the business.

ii.To become eligible under this Trade Circular, at least one Refund Audit of the claimant dealer should be completed in respect of at least one year ending on or before 31st March 2008.

iii.The dealer with net worth exceeding Rs. 100 Crore and wanting to avail the benefit of quick refund under this circular should apply to enrol himself with the Joint Commissioner of Sales Tax concerned, in the format provided in Annexure-2 . Along with application the applicant should submit a complete copy of the last audited balance sheet and trading and profit and loss Accounts, and if the applicant dealer is a company, then a copy of the annual report.

iv.The Joint Commissioner of Sales Tax having control over the Refunds and Refund Audit of the dealer will verify the enrollment application submitted by the dealer and after due verification shall communicate the eligibility to the applicant dealer.

v.For availing the refund, as per this circular, the dealer should submit the following documents with Form 501: -

1.Self-Certified Copies of returns filed for relevant periods.

2.No Dues Certificate as per Annexure-3 .

vi.The dealer who wants to avail benefit under this Trade Circular, in respect of any period contained in the year 08-09 should first declare his outstanding liability under the Central Sales Tax Act, to the extent of all types of missing declarations [in Form C, D, F, H, I and J] and certificates [in Form E1 and E2] for all the periods starting on or after 1st April 2005 and ending nine months prior to the beginning of the year to which the refund relates. The payment of CST liability on such account should be made by the dealer before filing the first application for refund in respect of any year. The details of the missing forms and details of the corresponding CST payment made by the claimant dealer should also be furnished in the form given in Annexure 5 at the time of making the first application for refund in respect of any given year.

vii.The copies of the challans showing CST payment provided for above should be submitted with Form 501, while submitting the same to the appropriate Refund Authority.

viii.In case, the missing declarations and certificates are received by the claimant dealer subsequently, he may submit a separate application for the corresponding refund claim to the extent of the CST liability discharged while making application for refund under this circular. The application should list the declarations and certificates subsequently received on which the dealer has already discharged tax liability. This application in Form 501 for refund of differential Central Sales Tax paid should be made by combining together all such CST refund claims for the last six months. The dealer should not present such claims more than twice in respect of any year, to which such declarations and certificates relate.

ix.The dealers, who are dealing in Iron and Steel or Dyes and Chemicals, are not eligible to avail the benefit of this Trade Circular. However, the manufacturers, whose basic input is iron and steel or dyes and chemicals but their final manufactured product is not covered by these respective entries are eligible to avail the benefits under this Trade Circular, subject to satisfaction of other conditions.

x.The dealers eligible under this Trade Circular should submit 'Annexure-4 , with Statutory Audit Report (Form-704, when due).

xi.The claim for VAT refund under this circular shall not be considered after one year from the end of the financial year to which the claim relates.

xii.If the claimant dealer fails to comply with any of the conditions above, he will not be eligible to receive 100% pre-audit refund, without Bank Guarantee.

xiii.Only those refund claims arising for the periods starting on or after 1st April. 2008 onwards will be entertained under this Trade Circular.

xiv.The claimant dealer should follow all statutory deadlines to file the returns and other obligations under the MVAT Act and Rules.

4.BANK GUARANTEE: -

i.The eligible dealers need not furnish any Bank Guarantee in respect of his claim of refund.

ii.The conditions laid down in the earlier Trade Circular 56 T of 2007 Dt. 23.08.2007 in respect of Bank Guarantee, are not applicable to eligible dealers for claiming refund under this circular.

5.PRE REFUND AUDIT PROCESSING:

The claim of the dealer for the refund would be scrutinized vis a vis the statutory requirements as also requirements under this circular including verification of form 501, its annexure and attachments. Thereafter the claim shall be processed and refund will be granted.

6.GRANT OF REFUND: -

i.The refund will be granted under this Trade Circular within 15 working days of making the application, along with all the required details and annexure and the grant of refund will be subject to post refund audit.

ii.Full refund will be granted as per application in form 501, subject to other conditions laid down in this circular.

iii.In case of a PSI dealer who holds the entitlement certificate for part of an industrial undertaking through investment in an expansion unit and whose production from the old and expansion units is identifiable, (i.e. production facilities are separate), then in such cases, the refund will be granted only in respect of purchases corresponding to the production of the expansion unit in the total production. Cases in which the investment in expansion unit does not result in identifiable (separate) production capacity but strengthens/upgrades the existing technology, product quality or quantity, purchases entitled for refund shall be worked out in proportion to the new (PSI) investment in the total investment.

7.POST AUDIT:-

i.Only one post-refund audit would be undertaken in respect of any year. In case of Refunds of dealers who have been accorded Large Tax Payer Unit Status (LTU dealers) the audit of the dealers shall be taken up by the Refund and Refund Audit branch in consultation with JC (LTU). However, where the eligible applicant dealer is not a LTU dealer the Refund Audit would be initiated in his case by the refund audit branch. Audit in every case will be taken up after filing of Audit Report in Form 704. No intermediate Refund Audit of the beneficiary dealers will be performed by the departmental authorities under this circular.

ii.Where the vendors have not paid the due tax in full or part the claimant dealer is expected to discharge such liability before Post Audit, by submitting a Revised Return and paying the due tax. This tax has to be paid by the eligible dealers under this circular before the Post Audit starts. Excess Refund granted, if any, will be recovered from the dealers as per the provisions of the law.

iii.Following documents are to be submitted by the dealers before the Post Audit i.e. Annual Audit (Only once in a year).

1.Monthly summary of Sales and Purchases.

2.Reconciliation statement, if there are any differences in Return figures and Monthly summary of Sales and Purchases.

3.Details of Sales effected by the claimant dealer in the form shown in Annexure 6.

4.Challans showing CST payment for missing declarations.

5.Statement of goods returns/Dr. Notes and Cr. Notes.

For taking refund under this Trade Circular in respect of any period starting on or after 1st April, 2008 for the year 2008-2009, all of the above mentioned procedures must be completed.

This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt he may refer the matter to this office for further clarification.

You are requested to bring the contents of this circular to the notice of all the members of your association.

(A.G.Deshmukh)

Commissioner of Sales Tax,

Maharashtra State, Mumbai.

No. :- VAT/Refund/2008-09/B-223 Mumbai - Dt : 23.05.2008

Trade Circular No. 19 T of 2008

1. Copy forwarded to:

a) All the Addl.Commissioners of Sales Tax in the State.

b) All the Jt. Commissioners of Sales Tax in the State.

c)All the Sr. Dy. Commissioners of Sales Tax in the State.

d) All the Dy. Commissioners of Sales Tax in the State.

e) All the Asstt.Commissioners of Sales Tax in the State.

f)All the Sales Tax Officers in the State.

2. Copy forwarded with compliments for information to:

a) The Officer on Special Duty, Finance Department, Mantralaya, Mumbai.

b) The Under Secretary, Finance Department, Mantralaya, Mumbai.

c)The Accounts Officer, Sales Tax Revenue Audit, Mumbai and Nagpur.

3. Copy to all the Desks and Desk Officers in the office of the Commissioner Sales

Tax, Maharashtra State, Mumbai.

Sd/-

(P.N.Patil)

Addl. Commissioner of Sales Tax (VAT) 1

Maharashtra State, Mumbai.

Annexure-1

Formula for calculation of net worth

Particulars

Amount

 

Net Assets

 

Less:

Net Liability

 
 

Balance

 

Annexure-2

Ref No:- . Date:-------------------

To

.. .,

. .,

.

Subject: - Request for Enrollment

Ref:- Trade Circular No .. .of 2008

Name of the Dealer

 
 
 

R.C. Number under MVAT Act, 2002

 

Address of the Place of Business

 
 
 

I /We, hereby request you to enroll us as eligible dealer in terms of the conditions prescribed in Trade Circular No. .of 2008 Dt, . I /We have understood all the conditions expressed in the Trade Circular referred above and undertake to abide by the conditions and guidelines referred therein.

Enclosed: Last audited balance sheet

Profit and loss and Trading account

Annual Report [where applicable]

Yours faithfully

Signature

Name

Status .

Date:-

Place:- ..

Acknowledgement:

Received an application from Shri/Smt ______________________________of M/s _________________________________________ for enrolling the company for availing the benefit in terms of the circular ______________________dated________. The decision about the eligibility would be communicated to your office within a week under the signature of the Joint Commissioner of Sales Tax.

Annexure-3

(To be submitted along with Form 501)

To

.. .,

. .,

.

Subject :- No Dues Certificate for claiming refund

Ref:- Trade Circular No .. .of 2008

Name of the Dealer

 
 
 

R.C. Number under MVAT Act, 2002

 

Address of the Place of Business

 
 
 

1)This is to certify that, there are no outstanding dues against /us either under the MVAT Act, 2002 or the CST Act, 1956.

2)The refund claimed in the return filed for the period (mentioned below)

From . .

To . . .01.03.2006 to 31.03.2006

Of Rs. .. ..

(In words Rupees

. .)

is not carried forward or as the case may be adjusted by me/ us to any subsequent/previous periods.

If it is found as a result of any order passed under MVAT Act, that the refund granted is in excess of the refund, if any, determined as per the said order, then excess amount be recovered as if it is an amount of tax due from me/us and I/We shall be liable to pay simple interest at the prescribed rate per month or part thereof from the date of the grant of refund.

Yours faithfully

Signature ..

Name ..

Status .

Date: -

Place: - ..

Annexure - 4

(To be submitted by the claimant dealer along with Form 704)

Guidelines for part 1:

1)The required information is to be given supplier wise. Details of invoices are not required. Only the cumulative supplier wise information, in the format below, is to be furnished.

2)The information is to be supplied only in respect of those suppliers in whose case the cumulative value of net purchases for the relevant year exceeds Rs. 10 lakh.

3)This information is to be furnished in electronic form.

Part 1

Sr

Supplier name

TIN

Net purchase value for the year

Tax collection @ 0%

Tax collection @4%

Tax collection @ 12.5%

Total taxes collected

Total tax paid

Difference not paid (if any)/short payment

Remarks

                     
                     
Part 2

Details of tax payment by the claimant dealer on account of the non-payment or short payment by vendor

Period

Bank name

Branch name

Date of payment

Tax paid

Total

       

Signature

Name ..

Status .

Date:-

Place:- ..

Annexure -5

(To be submitted at the time of making the first application for refund in respect of any year)

Statement showing differential tax on account of non-availability of valid declarations for interstate sales/deemed exports for

(Position of missing declaration and certificates as on _________)

Period From to .

M/s

Address

MVAT TIN

                     

(A) Missing Declarations in Form C for inter state sales

SR

Invoice No

Date

Invoice amount

Name of inter state purchaser

TIN of inter state purchaser

Differential CST amount payable

             

Total

           

(B) Missing Declarations in Form D for branch transfers

SR

Invoice No

Date

Invoice amount

Name of inter state purchaser

TIN of inter state purchaser

Differential CST amount payable

             

Total

           

Note: The information in respect of the missing declarations in Form D needs to be provided only for the inter state sales up to.........

(C) Missing Declarations in Form F for branch transfers

SR

Invoice No

Date

Invoice amount

Name of the consignee

TIN of the consignee

Differential CST amount payable

             

Total

           

(D) Missing Declarations in Certificate EI/E II

SR

Invoice No

Date

Invoice amount

Name of inter state purchaser

TIN of inter state purchaser

Differential CST amount payable

             

Total

           

(E) Missing Declarations in Form H for deemed exports to inter state purchasers

SR

Invoice No

Date

Invoice amount

Name of inter state purchaser

TIN of inter state purchaser

Differential CST amount payable

             

Total

           

(F) Missing Declarations in Form H for deemed exports to local dealers

SR

Invoice No

Date

Invoice amount

Name of purchaser

TIN of purchaser

Differential VAT amount payable

             

Total

           

(G) Missing Declarations in Form I for inter state sales

SR

Invoice No

Date

Invoice amount

Name of purchaser

TIN of purchaser

Differential VAT amount payable

             

Total

           

(H) Missing Declarations in Form J for inter state sales

SR

Invoice No

Date

Invoice amount

Name of purchaser

TIN of purchaser

Differential VAT amount payable

             

Total

           

Signature
Name ..
Status .
Date:-
Place:- ..

 










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