The Institute of Chartered Accountants of India Western India Regional Council

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1 The Institute of Chartered Accountants of India Western India Regional Council Seminar on E-filing of Returns and Forms under Various Acts Mumbai 11 th June 2011 E-filing of Returns and Forms under MVAT Act and CST Act - Govind G. Goyal Chartered Accountant Introduction The system of Value Added Tax (VAT) has been implemented, in the State of Maharashtra, w.e.f. 1st April, For smooth and effective implementation of VAT, the Department of Sales Tax and the Government of Maharashtra has taken several initiative, e-services is one of them. At present, following e-services are available in respect of various matters concerning Maharashtra Value Added Tax Act, 2002, (MVAT Act) and the Central Sales Tax Act, 1956 (CST Act): - 1. Registration of Dealers (e-registration) 2. Filing of Returns (e-return) 3. Payment of Taxes (e-payment) 4. Application for various Declaration Forms (e-forms) 5. Application for Refunds (e-501) 6. Submission of VAT Audit Report (e-704) While most of these services are mandatory, some of them are applicable to specified classes of dealers. The Department of Sales Tax is continuously working on to expand the network of e-services and also to improve upon the services presently available to the dealers and other through the website of the Department

2 Registration of Dealers Incidence and Levy of Tax As per the provisions of MVAT Act, a dealer is liable to pay tax on the basis of turnover of sales within the State. The term dealer has been defined u/s 2(8) of the Act. It includes all person or persons who buys or sells goods in the State whether for commission, remuneration or otherwise in the course of their business or in connection with or incidental to or consequential to engagement in such business. The term includes a Broker, Commission Agent, Auctioneer, Public Charitable Trusts, Clubs, Association of Persons, Departments of Union Government and State Government, Customs, Port Trusts, Railways, Insurance & Financial Corporations, Transport Corporations, Local authorities, Shipping and Construction Companies, Airlines, Advertising Agencies and also any corporation, company, body or authority, which is owned, constituted or subject to administrative control of the Central Government, any State Government or any local authority. However an agriculturist, educational institution and transporters shall not be deemed to be a dealer (subject to fulfilment of conditions). Dealers liable to pay Tax Section 3 of the MVAT Act provides that a new dealer, whose turnover of sales exceeds the prescribed limits during any year, commencing on or after 1st April, 2005, shall be liable to pay tax from the date on which such limit exceeds. A successor in business of any dealer shall become liable to pay tax on and from the date of succession. A dealer, applying for voluntary registration, shall be liable to pay tax from the date of registration.

3 Registration [Sec 16, R 8] Every dealer, who becomes liable to pay tax under the provisions of MVAT Act, shall apply for registration to the prescribed authority, in Form 101, within 30 days from the date of such liability. Turnover limits for the purpose of Liability/Registration [Sec 3(4)] Category of dealer Total turnover sales Turnover of taxable goods purchased or sold Importer Rs. 1,00,000 Rs. 10,000 Others Rs. 5,00,000 Rs. 10,000 It may be noted that while the total turnover of Rs. 1,00,000/- and Rs. 5,00,000/- is in respect of Turnover of Sales (which includes all sales whether of tax free goods or taxable goods), the turnover limit of Rs.10,000/- is in respect of taxable goods whether purchased or sold. Both the conditions have to be satisfied for the purposes of liability/registration under this category. [Sec 3(4)] It may further be noted that while, under the MVAT Act a dealer is liable to pay tax and consequential registration on the basis of crossing the specified turnover, but under the Central Sales Tax Act even a single transaction of interstate sale of any amount effected by a dealer attracts tax liability and consequential liability for obtaining certificate of registration. The procedure for making application for registration, under the CST Act is same as per the local VAT Act, the application for CST registration (whether mandatory or voluntary) can be made along with the application for registration under the MVAT Act.

4 E-Registration A. Online submission of application for Registration: 1. Dealer log on to web-site 2. Click on e-registration in e-services column on home page. 3. Instruction sheet: Detailed guidelines regarding application process flow, location details, list of required documents are provided in the instruction sheet. Click "next" and then "e registration information" page will appear. (please follow the instructions carefully) 4. e-registration Information page opens. 5. On the "e Registration Information"page, dealer should enter /select details such as PAN, location, name of business, name of applicant, status of applicant and Act. Applications under MVAT Act and CST Act shall be made electronically. For the time being applications for registration under all other Acts such as Profession Tax Act, Luxury Tax Act, Maharashtra Tax on the Entry of Goods into Local Areas Act and Sugarcane Purchase Tax Act should be submitted manually. 6. After the information on the "e Registration Information" page is entered, the dealer should click"next". 7. E-application under MVAT Act will open 8. Request id: Request id of the dealer will appear on upper corner of left side in red letters. Once Request id is generated, the information entered / selected on ' e- Registration Information Page' will not be editable hence dealer has to ensure that information filled on ' e-registration Information Page' is correct before clicking the next option. This request ID and PAN should be noted. If dealer wants to fill e-application in multi sessions, then dealer should enter this request ID and PAN in "Retrieval of Partially Filled Data" window which appears on e-registration Information page. 9. Information in the form should be completely filled either by entering in the relevant fields or selecting from the given lists and then "submit" button should be clicked. In case a dealer has opted for CST also, then the CST e-application form will open. The data in the fields common to both VAT and CST shall get populated for the ease of the applicant. Remaining fields are expected to be entered/selected by the applicant. 10. In case the data in any of the fields is not entered, then the applicant would get error message and would be prompted to enter the said data.

5 11. After the completely filled application form is submitted (uploaded) then the acknowledgment containing date and time for attending before Registering Authority along with code/designation and address of Registering Authority would be generated. This acknowledgment can be saved and should be printed for producing before the registering authority. The dealer should also save the downloadable MVAT and CST e- application form of registration and should take out a print of it. 12. The proprietor, partner, karta, Director, as the case may be, are required to sign at relevant place/places on the print out of the application so taken and submit it to the concerned Registration Authority at the time of verification and photo attestation on given date and time along with relevant documents. In case of voluntary registration signature of "introducer" should also be obtained. 13. If the application is correct and complete in all respect along with relevant documents then Registering Authority will generate TIN after due verification of documents. Registration certificates shall be printed and issued to the dealer on the appointed day. In case the application is eligible for granting registration, then the date of uploading the application shall be considered as the date of application for the purpose of determining the effective date of MVAT RC. In case the dealer has uploaded CST application also, then for the purpose of determining the CST RC effective date, the date of uploading CST application shall be considered as the application date. B. Physical submission & verification of documents and attestation of photograph: For attestation of photograph before the Registering Authority, the signatory to the application should be present. Depending upon the constitution of the dealer, the application printout should be signed By the proprietor/partner/director/authorized person, as the case may be. The application for Registration Certificate on grounds other than Voluntary Registration Scheme should be electronically uploaded within 30 days from the date of the event making the dealer liable for registration. However the application for Registration Certificate on account of transfer of business due to death should be electronically uploaded within 60 days. In case the application is in time, the Registration Certificate shall be granted from the date of the said event. If the application is electronically uploaded late, then Registration Certificate shall be granted from the date of application if the application is complete, valid and supported by all relevant documents. In case of application for Registration Certificate on grounds of change in constitution or transfer of business, the application in form 103 for cancellation of the Registration Certificate of earlier business should also be submitted along with the original Registration Certificate of earlier business at the time of verification on appointed date and time.

6 Documents required for the purposes of Registration The Commissioner of Sales Tax, Maharashtra, has issued a circular dated 4th May, 2005, whereby a dealer is required to submit following documents along with the application for registration in Form 101: (Copies of documents must be self-attested and are subject to verification from the original) A. In case of fresh registration: - (1) Proof of constitution of business (as appropriate): i. In case of proprietary firm: No proof required. ii. In case of partnership firm: (Registered or unregistered) Copy of partnership deed. iii. In case of company: Copy of Memorandum of Association and Articles of Association. iv. In case of other constitution: Copy of relevant documents. (2) Proof of permanent residential address* (Please provide at least 2 documents out of the following documents): i. Copy of passport. ii. Copy of driving licence. iii. Copy of election photo identity card. iv. Copy of property card or latest receipt of property tax of Municipal Corporation/Council/ Gram Panchayat as the case may be. v. Copy of latest paid electricity bill in the name of the applicant. (3) Proof of place of business i. In case of owner: Proof of ownership of premises; viz., copy of property card or ownership deed or agreement with the builder or any other relevant documents. ii. In case of tenant/sub-tenant: Proof of tenancy/sub- tenancy like copy of tenancy agreement or rent receipt or leave and licence or consent letter, etc. iii. Copy of Electricity Bill

7 (4) Two latest passport size photographs of the applicant ** (5) Copy of Income Tax PAN Card (in case of Proprietary business: PAN of Proprietor; in case of partnership business: PAN of partnership firm and of all partners; and in case of registered company: PAN of the company; in case of HUF: PAN of HUF and Karta etc.). (6) Proof for Payment of fees (***) (7) Proof of having a Current Bank A/c A leaf of cancelled cheque B. Registration in case of change in constitution of the dealer Proof of change in constitution (e.g., if proprietary dealer converted to partnership firm then copy of Partnership deed, etc.). Copy of latest return-cum-challan. PAN of new firm. Proof of permanent residential address. C. Registration in case of transfer of business All documents from 1 to 6 given in A. Copy of transfer deed. Copy of latest return-cum-challan of the original dealer. * In case of partnership firm, proof of residence has to be provided for all the partners, in case of body corporate, proof of residence of applicant. ** In case of partnership firm, photographs of only applicant partner need to be submitted. In case of corporate bodies, the details of place of residence and PAN, etc. shall be required to be furnished only for the signatory to the application. *** Further, in case of Voluntary Registration, it is necessary that the applicant dealer is having a current bank account and such dealer has to be introduced either by a registered dealer or by an advocate, chartered accountant or sales tax practitioner. (The fees payable for voluntary registration is Rs. 5,000/- while for others it is Rs. 500/- only).

8 In addition to payment of fees, as mentioned above, a dealer seeking Voluntary Registration, on or after 16th August 2007 but before 1 st may 2011, has to be make an advance payment of Rs /-. This advance may be adjusted by the dealer against tax, interest or penalty, if any, payable during the year of registration or in the immediate succeeding year. Any amount remaining unadjusted after the end of the 2nd year shall be refunded. From 1 st May 2011, this advance payment of Rs /- shall be treated as security deposit with the Department. Thus, it cannot be adjusted by the dealer against tax or any other liability. However, this security deposit shall be refunded to the dealer after such time and with such restrictions and conditions as may be prescribed. [For the time being, the amount of fees of Rs. 5000/- as well as the amount of advance payment/ security deposit of Rs /- (in case of voluntary registration) has to be made by way of bank draft to be deposited with the registering authority along with the application for registration. The bank draft shall be prepared, for applicant in Mumbai, in the name of "Bank of Maharashtra A/c MVAT", and in case of other places in the name of "State Bank of India A/c MVAT. The registration fee of Rs. 500/- MVAT and CST Rs. 25/- can be paid by way of Court Fee stamps] Filing of Returns and Payment of Taxes Tax payable by a dealer: [Sec 4] A dealer is liable to pay tax on the turnover of sales of goods, within the State, as per the rates specified in the schedules. The tax so payable for any tax period shall be reduced by the amount of input tax credit (set off) for which the dealer is eligible during the same tax period. Rate of Tax: [Secs. 5 & 6] as per Schedules Schedule A Essential Commodities (Tax free) Nil Schedule B Gold, Silver, Precious Stones, Pearls etc. 1% Schedule C Declared Goods 4% Schedule C Industrial Inputs, I T products and 5% such other specified goods Schedule D Foreign Liquor, Country Liquor Motor Spirits, etc At specified rates Schedule E All other goods 12.5% (not covered by A to D)

9 Tax Period Tax Period in relation to a dealer may be a calendar month, quarter (a period of three month; i.e., Apr to Jun, July to Sep, Oct to Dec and Jan to Mar) or six months (prescribed period of six months; i.e., April to September and October to March). Filing of Returns Every registered dealer shall be required to file correct, complete and self-consistent return, in prescribed form, by the due date. [Sec 20, Rules 17 to 20] Periodicity and due date: For the periods commencing from Sr. No. Category Periodicity 1. A) Retailers opted for composition Scheme Half yearly B) Tax liability, in the previous year, up to Rs.1 lakh or Refund entitlement up to Rs.10 lakhs. 2. A) Newly registered dealers Quarterly B) Dealers under Package Scheme of Incentive C) Tax liability, in the previous year, exceeds Rs.1 lakh but up to Rs.10 lakhs or refund entitlement exceeds Rs.10 lakhs but up to Rs.1 crore. 3. All other dealers whose tax liability, in the Monthly previous year, exceeds Rs.10 lakhs or refund entitlement exceeding Rs.1 crore.

10 Due date for filing return and for payment of taxes:- (1) In case of Half-yearly Returns: Within 30 days from the end of six monthly period. (2) Others: Within 21 days from the end of month or quarter as the case may be. Tax Liability for the purpose means aggregate of taxes payable by a registered dealer, in respect of all places of business within the State of Maharashtra, under the Central Sales Tax Act and MVAT Act after adjustment of amount of set off claimed. Return Forms and Payment of Tax From 1st April 2009, all dealers, whether required to file monthly, quarterly or six monthly returns, have to submit their returns in electronic format only. There are separate returns forms prescribed for various categories of dealers, i.e. Form Nos. 231 to 235. A dealer has to use appropriate form as may be applicable to him. All these forms have to be submitted electronically within the prescribed due date. A dealer shall first make payment of tax due in to the Government treasury through challan Form No. 210, (Form MTR-6 for payment of CST dues), and thereafter upload the return in appropriate form as may be applicable. A grace period of 10 days has been permitted for uploading of e-returns but the tax due, if any, has to be paid within the prescribed due date. It may further be noted that it is now mandatory for all types of dealers to make payment of taxes electronically. In case of delayed payments, interest is 15% p.a. Such interest is mandatory and shall be paid before filing of return.

11 Refunds of any period can be adjusted in the return/s for subsequent or any other period/s within the same financial year. As per the provisions of MVAT, refund cannot be adjusted against liability of the subsequent year; i.e., refund cannot be carried forward to the next financial year. However, for refunds relating to financial years as well as for , the Commissioner has issued Trade Circulars whereby the refund for these financial years could be carried forward to the subsequent year. The Commissioner of Sales Tax has also issued Trade Circulars (No. 15 T of 2010 dated ) and (15 T of 2011 dated ) whereby the dealers have been permitted to adjust the refund due for financial year against tax payable for the financial year , and, refund due for financial year against tax payable for the current financial year i.e , provided that the refund due as per return for the period ended 31 st March is less than rupees one lakh and the dealer has not filed an application for refund (in form 501) for such refund. Revised return, for any period, can be filed within 10 months from the end of the year in which such tax period falls or before receipt of notice for assessment, whichever is earlier. [Sec 20(4)] There are certain restrictions imposed on filing of revised returns, w.e.f. 1 st May E-Returns Registration of dealers for e-services Acknowledgement of e-services registration Physical submission of e-services registration acknowledgement Download Return Templates Offline filling of data Validation Uploading of Returns (Returns can be uploaded with the password, no need of digital signature) Generation of Acknowledgement

12 (The return acknowledgement is just for the records of the dealers. No need for physical submission to the Department). E-Payments Mandatory for all types of dealers. (Online demo) E- Declaration Forms All applications, being requisitions, for CST declaration forms such as C form, F form, H form, E-I and E-II forms, etc. have to be made electronically. There is no fees payable for obtaining such forms from the Department. The Department shall supply the required forms, by post/courier at the registered address of the dealer, after necessary verification. (Online demo) E-501 It is now mandatory to make application for refund, in Form 501, electronically. (Online demo) E-704 The audit report, in respect of accounts audited by a chartered accountant u/s 61 of MVAT Act, is required to be submitted electronically, w.e.f. 1 st October 2009.