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20 States VAT live April 1, 2005
AP
Goa 2 State/ UT implementing VAT
between the period April 1, 2005 to
Karnataka
March 31, 2006
Pondicherry
5 States implementing VAT wef
Tamil Nadu
Kerala April 1, 2006
Bimal Jain
VAT implementation in UP:-
• Value Added Tax (VAT) is a multistage tax, levied on value added at different
stages of production and distribution of a commodity or the supply of a service
Registration
1. Threshold limit Rs 5 lacs.
2. Auto Registration for Reg Dealer – Form VII & VIII within 60 days.
3. Compulsory for Transporters, Carriers, Forwarding Agents, Railway Agents etc –
transporting/storing goods.
Bimal Jain
VAT implementation in UP:-
Input Tax Credits:- ITC
• Allowed For intra-State purchase of goods for resale or use in manufacture.
• Not allowed in respect of Non-VAT goods, captive power plant and other
specified capital goods like office equipment, furniture, air conditioners etc.
• Input tax credits are not available for inter State (CST) procurement of goods.
• Stock transfers outside the State attract a reversal of input tax credit (ITC) to
the extent of 3%.
• Developers, co-developers and units in SEZ eligible for ITC on taxable goods for
specified operations.
• Specified goods to be notified under Schedule IV to be taxable at first point.
• Provisional refund of ITC to exporters.
• Refund of excess ITC to other dealers at the end of the assessment year next to the
assessment year in which it falls due.
ITC on capital goods (other than non creditable capital goods): “Capital Goods” means
plant, machine, machinery, equipment, apparatus, tools appliances, electrical
installation used for manufacture or processing of any goods for sale by the dealer
and includes components, spare parts, accessories, mould dies etc.
1. ITC on capital goods - in 3 annual installments.
2. No ITC on capital goods held in stock as on the date of commencement of the Act.
Bimal Jain
VAT implementation in UP:-
Purchase Tax
• Leviable on purchase of goods from un-registered dealers.
• Payable when such goods / goods manufactured from VAT inputs are disposed
off otherwise than by way of sale
Bimal Jain
VAT implementation in UP:-
• Prepared in Triplicate -> Separate tax invoice -> Performa is not yet prescribed.
• Suggested size of invoices not less than 10”x8.5” but not greater than 11”x8.5”
on paper of good quality.
• Include information and details about Consecutive serial no, date, Name & address
of purchaser, seller, TIN, description of goods – Qty, Value, Discounts, Rate of Tax
etc.
• Invoice shall be accompanied by transporter memo / LR copy.
• Every invoice should be pre-authenticated by Authorized person – Excise/Sales
tax.
• Separate Serial no for LST & CST sale.
• Invoice book binding from Sr.no.1 to 50 & followed.
Bimal Jain
VAT implementation in UP:-
Negatives of UP VAT:-
• Conversion of Sales tax exemption in to Deferment.
• VAT ITC on exempted FG – Not available to Dealer but available for
Taxable goods (CBU) – for 6 Months.(UP Mfg goods -Stock)
• No ITC on CG on Transition date & used in Works Contract.
• Tax Invoice as per Specified Format & Pre Authenticated by Approved
Person.
• Continuation of Form No.31 & Mobile Squad.
• Excess VAT ITC refund after completion of P.Y.
• Continuation of Entry Tax though Vatable.
Bimal Jain
VAT implementation in UP:-
Thanks
Bimal Jain