Page 251 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes (iii) all purchase invoices, copies of customs entries, receipts for payment of customs duty or
tax, and credit and debit notes received to be filed chronologically either by date of receipt
or under each supplier's name;
(iv) details of the amount of tax charged on each sale or purchase;
(v) total of the output tax and the input tax in each period and a net total of the tax payable or
the excess carried forward, as the case may be, at the end of each month;
(vi) details of goods manufactured and delivered from the factory of the taxable person;
(vii) details of each supply of goods from the business premises, unless such details are available
at the time of supply in invoices issued at, or before, that time.

Service Tax & VAT

Failure to keep these records may attract penalty. All such records should be preserved for the
period specified in respective State provisions.

No Declaration Forms

Most of the declaration forms that existed before the introduction of VAT have been dispensed
with. Use of declaration forms is expected to be stopped completely. Lot of time and energy is
wasted by the dealer in getting declaration forms from the department.

There is no provision for concessional sale under the VAT Acts since the provision for set off
makes the input zero-rated. Hence, there will be no need for declaration form.

Returns

Under VAT laws there are simple forms of returns. Returns are to be filed monthly/quarterly/
annually as per the provisions of the State Acts/Rules. Returns will be accompanied with the
payment challans. Some States have devised return cum challans. In these cases the returns
along with the payment can be filed with the treasury.
A registered dealer may be required to file a monthly/quarterly/annual return along with the
requisite details such as output tax liability, value of input tax credit, payment of VAT, etc.
Opportunity may be provided to lodge revised returns.
Every return furnished shall be scrutinized expeditiously within the prescribed time limit from
the date of filing the return. If any technical mistake is detected on scrutinizing, the dealer shall
be required to pay the deficit appropriately.
Return filing procedures under VAT laws are designed with the objective of:
(i) reducing the compliance costs incurred by the businesses in completing and filing their
returns; and
(ii) encouraging businesses to comply with their obligations to file returns and pay VAT
through the application of penalties in case of late payment of VAT and late filling of
returns; and

(iii) ensuring the efficient processing of the data included in the returns.
The basic simplification of VAT is with reference to assessment. Under VAT system, there is no
compulsory assessment at the end of each year. The VAT liability is self-assessed by the dealer
himself in terms of submission of returns upon setting off the tax credit, return forms etc. The
other procedures are also simple in all the States.

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