Online VAT Returns: Filing and Registration

By Devashish Jain, University of Petroleum and Energy Studies.

Starting with the definition of Value Added Tax (VAT), it is an indirect tax that is imposed on the consumption of the goods, paid by its original producer (The Manufacturer) upon the change in the goods to the ultimate consumer. It is based on the value added to the goods by the transferor, thus it is a tax in relation to the difference of the value added by the transferor and not just a profit on sale.

It is a multi- stage tax levied at each stage of the value of the addition chain, with a provision to allow input tax credit for tax paid at an earlier stage,.

[sociallocker]

Since 2005 VAT is applicable in nearly every state and union territory, VAT in India is very different from VAT in any other country as it was introduced to replace the system of the state level indirect taxes. By the virtue of VAT the procedure was relaxed and autonomy was brought into the said process. It would be wrong to state that it only existed since 2005. Generally, VAT is in existence since 1986 when the central excise tax was introduced it further came into limelight in 2002 when the 2002 due to service tax.

By the virtue of the sales the government is able to know how much is it due to VAT as the VAT is constituted on the sales. Every state has its own rates regarding the VAT percentage that is payable on different commodities.

VAT was first introduced on 1st April 2005 in India. The VAT is collected by each state Excise and Taxation Department and for that purpose one have to register yourself with them if one is in the business of providing the services or selling of goods. Once a person is registered with the said department, he/she will get the TIN no[1]. Which is used for the purpose of filling return online as username. As a general rule the VAT returns are to be filled at the end of the each 3 months.

  As per the National Informatics Centers report any registered dealer can file the return under VAT Act 2003.

Following are the steps for filing of the electronic return by virtue of download and upload method:-

  1. Enter user ID and password.
  2. Change the password if you are logged-in for the first time.
  3. Download form 14, 14D, 15 and save them as per the requirement.
  4. Returns are to be filled in the pdf version.
  5. After filling all the forms, click the ‘Check Form’ to check the entered data.
  6. Click on the ‘Export to xml file’ to create a corresponding XML file and save the same.
  7. Login again using the user ID and password.
  8. Upload the xml file.
  9. Print the acknowledgement receipt.

Procedure for registration:-

  1. Click on e-registration in the e service column on the home page.
  2. Detailed guideline is provided in the instruction sheet and click next, which will lead to the e-registration information page.
  3. On the e- registration information page dealer should enter all the necessary information like PAN no., location, name of business, name of applicant, status of the applicant and act.
  4. After filling all the required information. Click on ‘next’.
  5. A page for E – application under MVAT act will open.
  6. The requested ID of the dealer will be mentioned on the upper right corner of the said page.
  7. If all the information so mentioned is correct and compete the designated authority will issue you a TIN number which is also known as Tax Payer Identification Number. Which will act as the user ID for the said person.

In case of fresh registration the following documents are required:-

  1. Proof of constitution of business.
  2. Proof of permanent residential address (driving license, election identification card, passport), any two of them.
  3. Proof of place of business (sale/purchase deed or lease/rent deed).
  4. One recent passport size photograph.
  5. Copy of income tax assessment order.

VAT is payable in all the states of India, though the rate of the payment of the VAT may vary.

As a general rule[2] it is mandatory for every dealer having turnover of more than 10 lakh to get itself registered, but even in this there are exceptions as VAT is at state level discretion.

So for an instance as per the Delhi value added tax act 2004 under section 18 it is mandatory for every dealer to get itself registered who have an annual turnover of more than 20 lakh but initially the quantum of the taxable turnover was set to be 10 lakh which was subsequently increased to 20 lakhs.

Each and every state at its discretion, determine the value of the VAT that is payable on each and every commodity.

As per section 4 of the said act the rate of the tax that is levied on the various goods are mentioned as follows:-

All the goods that are specified in

  1. First schedule is exempted from the tax, they generally include books, vegetables, fruits, meats etc.
  2. The goods specified in the second schedule have to pay the tax at 1%, these goods include gold, silver, precious metals, etc.
  3. The goods specified in third schedule have to pay 4% of the said tax, these goods includes communication equipment, brick, utensils, coffee
  4. The goods specified in the fourth schedule have to pay about 20% of the VAT amount. Liquor, ticket, etc. are the few examples that come under 4th schedule
  5. For all other goods that are specified a general rate of 12.5% is to be paid. For an instance the food that is consumed in the restaurants.

As per the chapter of return in DVAT returns is to be filled by the virtue of the filing of the form DVAT 16 which is to be filled within 28 days from the end of the tax period along with the proof of payment in DVAT 20. The return period is about 1 a month for the dealers having turnover of 5 crore or above and quarterly for another. Revised returns can also be filed if an error is detected by the dealer which has resulted in payment of less tax. Revised returns are to be filled within the form DVAT 16 along with the explanatory note with the payment of tax deficiency and the interest return can be furnished within the period of 4 years as per the DVAT act. But in case of excess payment of tax, returns cannot be filled but the dealer can file an object application in that regard under section 74 of the said act.

Even though the returns are to be filled on quarterly basis but the payment of VAT is on a monthly basis. So every dealer in Delhi has to make the payment of the VAT so collected during the month on or before the 21st day of the subsequent month. The payment of VAT so collected can be made through any of the nationalized bank or by using the online facilities.

[1] Taxpayer Identification Number

[2] Subjected to exceptions

[/sociallocker]