MVAT Provisions and issues

1. 1 REFRESHING KEY ASPECTS OF VAT/CST AND VAT ACCOUNTING BY C A M A N I S H S O M A N I B.Com, FCA. B A H E T I & S O M A N I Chartered Accountants www.bandsindina.com

12. 1 VAT RETURNS DUE DATES Periodicity of VAT Returns: Tax liability in previous year Periodicity More than Rs. 10 Lakh Monthly More than Rs. 1 Lakh but less Than Rs. 10 Lakh Quarterly Less than Rs. 1 Lakh Six Monthly Due Date: VAT return has to be filed with 21 days from the relevant period (month/quarter/six months). .

24. 1 ISSUE DISCLOSURE OF VAT ON SALES AND PURCHASES VAT is collected from customers on behalf of the VAT authorities and therefore, its collection from the customers is not an economic benefit for the dealer and it does not result in any increase in the equity of the dealer. Accordingly, it should not be recognized as an income of the dealer. Similarly, the payment of VAT should not be treated as on expense in the financial Statements of the dealer. Which is contradictory to Section 145A of Income Tax Act, 1961, same is to be disclose in reverse way in separate disclosure to Tax Audit Report. In view of above, as per "GN " it is recommended that the amount of tax collected from customers on sale of goods should be credited to an appropriate account, say, VAT (CST) Payable Account. (Rate wise Collection account are to be maintain for discloser in returns.) .

27. 1 CLOSING ENTRIES VAT From F.Y. 2007-2008, no refund is carry forward able to next year, hence separate account should be maintain at the year end, so it is not utilized in next year and can be separately shown in books. .

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