TITLE AND SCOPE OF MVAT ACT

Act may be called the Maharashtra Value Added Tax

ACT, (Levy and Amendment) Act, 2005

It shall come into force with effect from such date as the
state Government may appoint by notification in the
Official Gazette.

Following earlier Acts have been repealed and merged in
to VAT

a) The Bombay Sales Tax Act 1959

b) The Maharashtra Sales Tax on Transfer of Property in
goods involved in execution of Works Contract
(Re-enacted) Act, 1989

c) The Maharashtra Sales Tax on Transfer of Right to
use any goods for any purpose Act 1985

d) Bombay Sales of Motor Spirit Taxation Act 1985



GENERAL PROVISIONS OF MVAT ACT

MVAT is applicable for sale and deemed sale
effected within the state.

VAT is applicable to all types of businesses such
as Manufacturer, Importer, Distributor, Whole
Seller, retailer etc.

VAT is not applicable on
a) Sales outside the state
b) Sale in the course of inter-state sales
c) Sale in the course of export and Import

No provision for levy of purchase tax

No Input Tax Credit available on CST purchases



GENERAL PROVISIONS OF MVAT ACT
All additional taxes viz. TOT, SC, RST abolished.

Local Sales Tax declarations withdrawn.

Input Tax Credit is available on purchases of raw
materials, trading goods, packing materials. Capital
assets and other goods used in business.

Input Tax Credit is also available on Entry Tax.

Tax rates have been restructured to only two main rates
viz. 4% and 12.5%

Grater reliance is placed on self assessment and
voluntary compliance.
IMPORTANT CHANGES IN DEFINITION

BUSINESS : Includes Service.

DEALER : Includes person engaged in business of
deemed sales like Works Contract, Lease Contract, and
an Auctioneer and Trust.

PURCHASE PRICE : Purchase price includes purchase
price for Works Contract.

SALE : Includes deemed sale.

SALE PRICE: Sale price includes sale price for Works
Contract.

SERVICE: Means services as may be notified by the
state government.

TAX : Includes any amount payable by way of
composition but does not include purchase tax.

ELIGIBILITY FOR REGISTRASTION

Dealer holding registration under earlier laws shall be
deemed to have been registered under MVAT Act 2002.


Dealer not holding registration under the Bombay Sales
tax Act, but holding registration under the other laws
will have to apply for fresh registration with in 30days
from the appointed day.


Provision for Voluntary Registration remains but no
deposit is required to be paid.


Dealer liable to pay tax under the CST Act, shall be liable
for payment of tax and registration under the MVAT Act.

TIN (Tax Identification Number) will be issued after 6 to
12 months.
THRESHOLD LIMIT FOR REGISTRATION
DEALER
TURNOVER OF
TAXABLE
GOODS
TOTAL TURNOVER
Importer 10,000 1,00,000
Other Dealers 10,000 5,00,000
Voluntarily
Registered Dealer
N.A. N.A.
CST RC Holder N.A. N.A.
RATES OF TAXES UNDER MVAT ACT
Sr.
No.
Description of goods Rate of Tax Schedule
1 Goods of daily necessities
Nil A
2 Gold, Silver, Precious Stones
and articles of Jewellery
1% B
3 Declared goods, Raw
materials, Telecom products,
IT products, Industrial inputs,
Notified capital goods, Bulk
drugs etc.
4% C
4 Indian made foreign liquor and
country liquor
20%
D

5 Various products of Motor
Spirit
28 to 34% E
6 All goods not listed in any of
the above schedule
12.5% F
MECHANISM OF VAT
Dealer
Manufact-
urers
price /
Resellers
input cost
Less :
Input
Tax
Credit
Net
Purchase
Price
Value
Addition
(Margin)
Sale
Price
Tax @
10%
Tax paid
to Govt.
Manufa-
cturer
100 - 100 - 100 10 10
2
nd

Seller
110 -10 100 50 150 15 5
3
rd

Seller
165 -15 150 50 200 20 5
4
th

Seller
220 -20 200 50 250 25 5
Total 595 -45 550 150 700 70 25
IMPACT ON MANUFACTURERS SELLING PRICE
WHERE INPUT SOURCED FROM VARIOUS SOURCES
SOURCES
AND
UTILISATION
OF INPUT
% OF
INPUT
USED
IN
MFGR.
INPUT
USED
IN
MFGR.
(Rs.)
TAX
INCIDE
NCE ON
INPUT
(Rs.)
COST OF
INPUT
USED IN
MFGR.
(Rs.)
LESS:
INPUT
TAX
CREDIT
( Rs.)
NET
COST OF
INPUT

(Rs.)
OTHER
OVERHE
ADS AND
MARGIN
( Rs. )
MAFRS
SELLING
PRICE
Local
purchases
used in FG for
sale from
state of
manufacture
40% 40.00 5.00
@ 12.5%
45.00 5.00
@ 12.5%
40.00







100.00








202.00
Local
purchases
used in FG for
Branch
Transfer
outside state
30% 30.00 3.75
@12.5%
33.75 2.55
@ 8.5%
31.20
Interstate
purchases
used in FG for
sale
20% 20.00 0.80
@ 4%
20.80 Nil
(No ITC
on CST)
20.80
Imports used
in FG for sale
10% 10.00 Nil
(No tax
on
Import)
10.00 Nil
( No ITC
on
Imports)
10.00
TOTAL 100% 100.00 9.55 109.55 7.55 102.00
IMPACT ON CONSUMERS PRICE WHERE GOODS
SOLD WITHIN THE STATE OF MANUFACTURE
DISTRIBUTION
CHAIN
INPUT
COST

( Rs. )
LESS:
INPUT
TAX
CREDIT
(Rs. )
NET
INPUT
COST
(Rs.)
MARGIN
%
MARGIN
AMOUNT

(Rs.)
SELLING
PRICE
(Rs. )
TAX
APPLIC
ABLE
(Rs.)
GROSS
SELLING
PRICE
(Rs.)
Sale by
Manufacturer
to whole seller
within state
202.00 N.A.
(Included
in price)
202.00 N.A.
(Include
d in
price)
N.A.
(Included
in price)
202.00 25.25
@ 12.5 %
227.25
Sale by Whole
Seller to
Retailer within
state
227.25 25.25 202.00 15 % 30.30 232.30 29.03
@ 12.5%
261.33
Sale by
Retailer to
Consumer
within state
261.33 29.03 232.30 10 % 23.23 255.53 31.94
@ 12.5 %
287.47
IMPACT ON CONSUMERS PRICE WHERE GOODS SOLD
THROUGH BRANCH TRANSFER OUTSIDE
THE STATE OF MANUFACTURE
DISTRIBUTION
CHAIN
INPUT
COST

( Rs. )
LESS:
INPUT
TAX
CREDIT
(Rs. )
NET
INPUT
COST
(Rs.)
MARGIN
%
MARGIN
AMOUNT

(Rs.)

SELLIN
G
PRICE
(Rs. )
TAX
APPLIC
ABLE
(Rs.)
GROSS
SELLIN
GPRICE
(Rs.)
Transfer by
Manufacturer
to Branch
outside state
202.00 N.A.
(Includ
ed in
price)
202.00 N.A.
(Included
in price)
N.A.
(Included
in price)
202.00 N. A.
( No
tax on
BT)
202.00
Sale by Branch
to Whole
Seller in
transferee
state
202.00 N. A.
No ITC
on BT)
202.00 N. A.
(Included
in price)
N. A.
(Included
in price)
202.00 25.25

@12.5%
227.25
Sale by Whole
Seller to
Retailer in
transferee
state
227.25 25.25 202.00 15% 30.30 232.30 29.03

@12.5%
261.33
Sale by
Retailer to
Consumer in
transferee
state
261.33 29.03 232.30 10% 23.23 255.53 31.94

@12.5%
287.47
IMPACT ON CONSUMERS PRICE WHERE
GOODS SOLD THROUGH INTERSTATE SALE
DISTRIBUTION
CHAIN
INPUT
COST



( Rs. )
LESS:
INPUT
TAX
CREDIT

(Rs. )
NET
INPUT
COST


(Rs.)
MARGIN
%
MARGIN
AMOUNT



(Rs.)
SELLIN
G PRICE



(Rs. )
TAX
APPLIC
ABLE


(Rs.)
GROSS
SELLIN
GPRICE


(Rs.)
Inter-state sale
by Mfgr. to
whole seller in
the receiving
state
202.00
N. A.
(Included
in price)
202.00
N. A.
(Included
in price)
N. A.
(Included
in price)
202.00
8.08

@ 4%
CST
210.08
Sale by Whole
seller to
Retailer in
receiving state
210.08
N. A.
( No ITC
on CST)
210.08 15% 31.51 241.59
30.20
@
12.5%
271.79
Sale by Retailer
to consumer in
receiving state
271.79 30.20 241.59 10% 24.16 265.75
33.22
@
12.5%
297.97
TAX INVOICE

A registered dealer under MVAT Act selling taxable
goods to another registered dealer has to issue a Tax
Invoice in the prescribed format.


The tax invoice should be preserved for three years from
the end of the year in which the invoice is raised.


Provision of Tax invoice is not applicable for
a) the transactions effected under CST Act,
b) Dealers paying tax under composition.
c) Unregistered dealers.


Bill or Cash Memo can be issued by registered dealer
paying tax under composition (other than a works
contractor) or by an unregistered dealer.

TAX INVOICE
Tecnimont ICB Pvt. Ltd.
Chincholi Bunder, 504, Link Road , Malad (W), MUMBAI 400 062
ST RC No. Dt.
Invoice to Invoice L/R R/R No.
M/s Phillips India limited Date Date
Andheri (East), D/Note No. P.O. No.
Mumbai 400 093 Date Date
Customers RC No. Date
Sr. No.
Description of Goods Quantity Rate Amount
Total
Trade discount
Packing Material
Octroi
Freight
VAT @
CST @
Total
I/We hereby certify that my/our registration certificate under the Maharashtra Value Added Tax Act,
2002 is in force on the date on which the sale of the goods specified in this tax invoice is made by
me/us and that the transaction of sale covered by this tax invoice has been effected by me/us and it
shall be accounted for in turnover of sales while filing of returns and the due tax, if any, payable on
the sale has been paid or shall be paid.
for Tecnimont ICB Pvt. Ltd.,
Sd
TAXABLE TURNOVER- NON COMPOSITION
METHOD



Taxable turnover of registered dealers under non-composition
method for various types of sale transactions can be
determined as follows:

1) Transactions of sale of goods : Total Sale price as
determined by the contract of sale.

2) Lease transaction : Total lease rentals as per lease
agreement for predetermined period.

3) Hire purchase transaction : Installment representing sale
price receivable during predetermined period.

4) Works Contract Transactions : Turnover determined by
choosing either of the following methods:





WORKS CONTRACT TURNOVER- NON
COMPOSITION METHOD

A) Where prescribed deductions can be estimated from
books of account :

Total Contact Value : xxxxxx
Less : Prescribed deductions:
a) Labour charges for execution of
Works Contract xxxx
b) Amount paid to subcontractor xxxx
c) Charges for planning designing &
Architects fees xxxx
d) Charges for acquiring machines, tools etc. xxxx
e) Cost of consumable in which property does
not pass to contractee xxxx
f) Cost of establishment relating to supply of
labour and services xxxx
g) Other expenses relating to supply of labour
and services xxxx
h) Profit of contractor relating to labour
& services xxxx
------------
BALANCE = Taxable Amount xxxxx


WORKS CONTRACT TURNOVER- NON
COMPOSITION METHOD
A) Where prescribed deductions cannot be estimated from
books of account : Turnover = Total Contract Value
Less : following Deductions

Sr.No. Nature of Contract % of deduction
1. Installation of Plant and Machinery 15
2. Installation of Air Conditioner and cooler 10
3. Installation of Elevators 15
4. Fixing of marble slabs, granite & tiles 25
5. Civil works like construction of Bldg. Roads etc. 30
6. Construction of Railway Coaches etc. 30
7. Ship and Boat building etc. 20
8. Sanitary Fittings, Plumbing, Drainage etc. 15
9. Painting and Polishing 20
10. Construction of Motor Vehicles and Trucks 20
11. Laying Pipes 20
12. Tyre re-trading 40
13. Dyeing and printing of Textile 40
14. Any Other Works Contract 20
TAXABILITY UNDER COMPOSTION METHOD
Composition options for payment of tax are available to
following dealers under MVAT Act :

1) Works Contractor :

Total Contract Value x x x x x x
Less : Amount payable to sub-contractor x x x x x
-------------------
Balance Contract value = Taxable Turnover x x x x x x

Tax @ 8% on the Taxable Turnover = x x x x x

Less: Set-Off @ 16/25 i. e. 64% of x x x x x
local tax paid on purchases
------------------
Balance Tax payable x x x x x
------------------
TAXABILITY UNDER COMPOSTION METHOD
2) Retailer :
Types of
Dealers
Nature of sale se
transactions
Rate of composition Conditions
Retailers
whose at
least 90%
of the sale
is directly
made to
customers
who are
not dealers
Resale made by a
registered dealer
of any goods
excluding
a) Foreign Liquor
b) Country Liquor
c) Drugs and
d) Motor Spirits
8 % of profit elements
arrived at as given
below:
Six monthly turnover
of eligible sales
Less :
Six monthly turnover
of purchases effected
from registered dealer
including the amount
of tax paid separately

1. Application should
be made in Form 4

2. Selling dealer does
not collect tax
separately.

3. Selling dealer
does not claim
set-off on input

4. For first six
monthly period
starting from 1
st
April 2005, only
5/6
th
of the
turnover should be
considered
instead of full
100% turnover.
TAXABILITY UNDER COMPOSTION METHOD
3) Restaurants, Clubs and Hotels :
Types of
Dealers
Nature of sale or purchase
transactions
Rate of
composition
Conditions
Restaurants,
Clubs and
Hotels
Total sale of food and non-
alcoholic drinks served other
than by Four Star and above
Restaurants and Hotels
8% of T.O. of
sales by
registered
dealers


10% of T.O.
of sales in
case of
un-registered
dealers
1. Application
should be
made in
Form-1

1) Dealer is
not entitled
for ITC or
refund

2 ) Dealer shall
not collect
tax separately
from customer
TAXABILITY UNDER COMPOSTION METHOD
4) Caterers :
Types of
Dealers
Nature of sale or purchase
transactions
Rate of
composition
Conditions
Caterers Sale of food and non-
alcoholic drinks served at
any place other than
Restaurant
6% of T.O. of
sales by
registered
dealers

8% of T.O. of
sale by
un- registered
dealer
1. Application
should be
made in
Form 2

2. Dealer is
not entitled
for ITC or
refund

3. Dealer shall
not collect
tax separately
from customer

TAXABILITY UNDER COMPOSTION METHOD
5) Bakers :
Types
of
Dealers
Nature of sale or
purchase
transactions
Rate of composition Conditions
Bakers Total sale of bakery
products
4% of
turnover of sale for
1) Registered Bakery
owner having
turnover of less than
Rs. 30L in the
previous year

6% of turnover of
sale for
2) Un-registered
dealer having
annual turnover
not less than
30L
1. Application
should be
made in
Form - 3

2. Dealer is not
entitled for
ITC or refund






TAXABILITY UNDER COMPOSTION METHOD
6) Dealer in Second Hand Motor Vehicles :
Types of
Dealers
Nature of sale
transactions
Rate of composition Conditions
Dealer in
Second
hand
Motor
Vehicles
Sale of second hand
passenger motor
vehicle Registered
dealer whose
principal business is
buying and selling of
motor vehicles.
4% of
turnover of sale of
motor vehicles.

1. Application should
be made in Form-5

2. Selling dealer has to
prove that the Entry
Tax in respect of
vehicles sold has
been paid.

3. Selling dealer shall
be entitled for
set-off of tax paid
on purchases of
material used for
re-conditioning or
refurbishing of the
said vehicles.
RETURNS

No provision for Annual Return.

Every Registered dealer shall file a Correct, Complete and self
consistent Return in prescribed Form.

The Return shall be deemed complete and self consistent if

a) Details provided in the return form are filled in fully.

b) All the items in return such as sales & purchase turnover,
claims of set-off, claims for goods return, calculation of tax,
details of payments and eligible deductions are provided and
are arithmetically self consistent.

Monthly returns will be audited by a Chartered Accountant
and scrutinized by the Department.

RETURNS
Defect Memo :

If the Return is not complete and self consistent, the
commissioner may serve on the dealer a Defect Memo.

After receipt of the Defect Memo the dealer has to
correct the defect memo and submit a fresh self
consistent and complete return within one month from
the service of the Defect Memo.

Revised Return :

Revised return U/S 20(5) can be filed any time before
the notice for assessment is served
OR
Before the expiry of six months from end of the year in
which said return is furnished, whichever is earlier.

RETURNS
Periodicity for filing Returns and Payment of taxes under MVAT Act.
Sr. No. Dealer Tax Liability
Rs.
period Due date Form
No.
1. Registered Dealer Exceeding
1,00,000
Monthly 20
th
day of the
following month for
Jan. & Feb. and 25
th

day for rest of the
months.


201
2. Registered dealer Between12001
to 1,00,000
Quarterly Within 25 day from
the end of the period
of the quarter.

202
3. Registered dealer Up to 12000 6 Monthly Within 25 day from
the end of the period
of 6 month.

203
4. Registered dealer
opted for
composition
Not prescribed
as yet
6 Monthly Within 25 day from
the end of the period
of 6 month.

204
5 Restaurants opting
for composition
As prescribed As may be
prescribed
As may be
prescribed
205
6. Bakeries opting for
composition
As prescribed As may be
prescribed
As may be
prescribed
206
7. Second Hand Car
dealer
As Prescribed As may be
prescribed
As may be
prescribed
207
8. Motor Spirit dealer As prescribed As may be
prescribed
As may be
prescribed
208
AUDIT
Audit by Chartered Accountant :

Every Registered dealer whose turnover of sales or
purchases exceed Rs. 40,00,000/- has to get his accounts
audited by a Chartered Accountant.

The dealer has to furnish Audit Report to the Department
with following documents within eight months form the end
of the year to which the report relates.

1)Profit & Loss Account and Balance Sheet with detailed
schedule of Fixed Assets.

2) Reconciliation of sales and purchase figures shown in the
Returns with the figures shown in Profit & Loss Account
and Balance Sheet.

3) Proof of payment i. e. tax paid challans

4) Information regarding credit purchases

5) statement of set-off claimed in the prescribed form.

AUDIT

6) Contravention statement of CST purchase like goods
not included in RC, goods not utilised for intended
purpose, statement of missing forms such as C, E-I, E-II,
H, F etc.

7) Details of URD purchases, where purchases made
from a dealer exceeding Rs. 10,000/-

8) The auditor will verify the following details from books
accounts with the returns filed and submit the Audit
Report with his observations.

a) Turnover of sales and purchases including CST
b) Computation of Set-off claimed
c) Computation of CST payable with description of goods
and Schedule and Entry.
d) Branch transfers with respect trading and
manufactured goods etc.

Failure to submit Audit report in time will attract penalty
equal to 1/10% of the total sale or Rs. 1,00,000/-
whichever is less.


AUDIT
Audit by Department :

1) In addition to C. A. Audit, the Department may also
arrange for audit of business of any dealer.

2) Department can carry out audit in respect of any period

3) During the course of audit the Commissioner may require
the dealer to
a) Afford the necessary facility to produce books of
accounts and other documents or verify stock and cash.
b) Furnish any information as may be required for ensuring
compliance.
4) The Officer conducting audit is prohibited from removing
any books of accounts.

ASSESSMENT

There is no provision for annual assessment in MVAT
Act.

Where a registered dealer fails to file a return in
respect of any period by the prescribed date, the
Commissioner may carry out Best Judgment
assessment.

Where Commissioner considers it necessary to ensure
the correctness of the return filed, shall assess the
return of any period by calling any
information/documents from the dealer.

Where the Commissioner has reason to believe that a
dealer liable to pay tax has not applied for registration
and paid tax, can pass Best a Judgment assessment
order.
SET-OFF
General conditions for granting Set-Off
Set-Off can be claimed only on production of original Tax
Invoice.

The dealer has to preserve and produce the original Tax Invoice
for claim of Set-Off when demanded by the Authority.

No Set-Off can be claimed unless the dealer has maintained
purchase register in chronological order as prescribed under
Rules.

Set-Off amount can be adjusted against tax payable under
MVAT and CST Act. Balance if any can be carried forward to
subsequent period in the same year.

Set-Off remaining un-adjusted at the end of the year will be
refunded.

Set-Off of tax paid on trading goods purchased before appointed
day and held in stock as on 31.03.2005 can be claimed
immediately after the appointed day.



SET-OFF ON GOODS HELD IN STOCK AS ON
31.03.2005


1) Set-Off is available of tax paid on
a) Purchases of Trading Goods and Capital Assets for resale
under Bombay Sales Tax Act
b) Purchases of goods under Motor Spirit Act
c) Purchases of goods under Works Contract Act
d) Purchases of goods under Lease Act
e) Entry of Motor Vehicles under Entry of Motor Vehicles Act
f) Entry of Goods under Maharashtra Tax on Entry of Goods
in to Local Area Act.

2) Set-Off for purchases effected under Bombay Sales Tax Act
is available for
a) Sales Tax paid separately
b) Sales Tax included in purchase price
c) Purchase Tax paid

3) Set-Off on opening stock will be granted during the year
2005-06 in the month of April itself.


SET-OFF ON GOODS HELD IN STOCK AS ON
01.04.2005

4) No Set-Off is available
a) For turnover tax, Surcharge and Resale Tax
b) If stock statement as required, is not submitted
c) If Set-Off is already claimed under the earlier law
d) Unless goods are resold after 01.04.2005 and before
31.12.2005
e) On Capital Assets purchased prior to 31.03.2003

5) Set-Off on capital goods can be claimed only if they are
resold and in the month in which they are resold.

6) Stock statement for opening stock of trading goods for
claiming set-off has to be submitted before 30.04.2005 in
the prescribed form.

7) Set-Off of Purchase Tax paid for contravention of Form
N-14, 14-A and 14-I can be claimed only in the month of
contravention declared and P/T paid there on but before
31.12.2005.


SET-OFF ON PURCHASES MADE AFTER 31.03.2005
Full Set-Off is available on the following goods :
No. NATURE OF INPUT CONDITIONS IF ANY
1. Capital Assets Set-Off not available on Office
Equipments, Furniture, Fixture
and Electrical Installations.
2. Motor Vehicles Set-Off available only if used as
goods vehicles and for Motor
Vehicle dealers or Lease tax
paid on Motor Vehicles.
3. Raw Material N. A.
4. Parts N. A.
5. Components N. A.
6. Spares N. A.
7. Packing Materials If used in packing of Taxable
Goods or resold.
SET-OFF ON PURCHASES MADE AFTER 31.03.2005
No. NATURE OF INPUT CONDITIONS IF ANY
8. Other purchase debited
to P&L A/C
If receipts on account of sale of
goods is more than 50% of the
total receipts.
9. Trading Goods N. A.
10. Motor Spirit If only resold or stock
transferred.
11. Incorporeal or Intangible
goods
Viz. Import License, Exim Scrips,
Duty Free Advance License,
Export Permit / License / Quota ,
DEPB and Software for Software
dealers.
12. Tax paid under
Maharashtra Tax on
Entry of Motor Vehicles
Full Entry Tax Paid
13. Tax paid under Entry of
any Goods in to Local
Area
Full Entry Tax paid
SET-OFF ON PURCHASES MADE AFTER 31.03.2005
Set-Off at reduced rate is available on following goods:
Sr. No. Description of goods Extent of Reduction
1. Taxable goods used as Fuel 4% of PP
2. Taxable Goods used in manufacture of
Tax Free goods.
4% of PP
3. Packing Material used for sale of Tax
Free goods
4% of PP
4. Taxable goods used in manufacture of
Goods for Branch Transfer.
4% of PP
5. Input used in execution of Works
Contract under Composition option
36 % of Input Tax paid
on Local Procurement
6. Liquor Vendors holding License in
Form FLII/CLIII where SP is less than
MRP
Set-Off available at
the ratio = SP/MRP
NON ADMISSIBILITY OF SET-OFF



No Set-Off / Input Tax under VAT is admissible on

1. Purchase of Motor Vehicles (other than Goods Vehicles)
and parts, components and accessories thereof.

2. Purchase of Motor Spirits unless they are resold.

3. Purchase of Capital Assets or consumables by job
worker not engaged in business of manufacture.

4. Purchases effected by 100% EOU, SEZ Units, PSIU
and100% EOU as these dealers are eligible for refund of
tax paid on input.

5. Purchases effected by way of woks contract where the
contract is for erection of immovable property

6. Purchases of building material which are not resold but
are used in the activity of construction.



NON ADMISSIBILITY OF SET-OFF

7. Purchases of Drugs/Medicine effected by Whole Seller

8. Crude Oil used by Oil Refineries for Refining

9. Purchases effected by Shipping Company

10. Purchases of incorporeal or intangible goods like
a) Trade Marks
b) Patents
c) Copy Rights etc.

11. Following purchases meant for own consumption:
a) Office Equipments
b) Furniture
c) Fixture
d) Electrical installations.

12. Purchases of goods debited to P&L Account, if out of
gross receipts of a dealer, the receipts on account of sale of
goods are less than 50% of the total receipts.


TAX DEDUCTED AT SOURCE

TDS is applicable on amount paid to works contractor
(other than transactions covered under CST Act).


Dealer requires to deduct TDS has to obtain Sales Tax
Deduction Account Number from the department by
making application in Form-401.


TDS should not be deducted from tax amount shown
separately.


TDS is required to be deducted form advance paid to a
contractor if the same is to be adjusted towards
purchase price payable to him.


The principal contractor should not deduct TDS from
payment made to his sub-contractor.



TAX DEDUCTED AT SOURCE

TDS due and deductible has to be remitted to the
Government with in 10 days from the expiry of the month,
irrespective of the actual amount of tax deducted.

A Contractor can apply to the Commissioner for a
certificate, stating therein that the TDS should be
deducted only on part of the amount or not to be
deducted at all.

The employer has to deduct the tax in above case either
on part of the amount or not to deduct at all in
accordance with the certificate issued by the
Commissioner.

Employer deducting tax has to furnish TDS certificate in
Form-402 to the contractor immediately after deduction.




TAX DEDUCTED AT SOURCE

The Employer issuing TDS certificates ha to maintain
details thereof in Form 404

The Employer also has to file Annual Return in Form 405 with the
Joint Commissioner of Sales Tax within three months from the
end of the year.

The employer has to deposit within 10 days in Form 210 & file a
statement in duplicate in the prescribed form within 20 days
from end of the relevant Quarter for which the TDS is deducted,
to the Assessing Authority of the contractor.

TDS may be required to be deducted only if the payment made
to Contractor exceeds Rs. 5 Lakhs during a year.

The rate of TDS is 2% for a registered Contractor and 4% in case
payment made to unregistered Contractor.

The Employer has to apply for WCT TAN within 30 days of
effecting TDS.