MVAT - FILING OF RETURNS AND PAYMENT OF TAXES

Every registered dealer is 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 1-4-2008

Sr. No.	Category	Periodicity
1.	A. Newly registered dealers (up to 30-4-2010)  B. Retailers opted for composition Scheme C. Tax liability, in the previous year, up to Rs. 1 lakh or Refund entitlement up to Rs. 10 lakhs	Half yearly
2.	A. Dealers under Package Scheme of Incentive  B. 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 C. Newly registered dealers (w.e.f. 1-5-2010)	Quarterly
3.	All other dealers whose tax liability, in the previous year, exceeds ₹ 10 lakhs or refund entitlement exceeding Rs. 1 crore	Monthly

Special Provisions for First and last returns

In case of newly registered dealers, first return to be filed from the 1st day of April or as the case may be from date of liability to pay tax to the end of quarter in which such date occurs. Thereafter quarterly returns till the end of financial year.

In case of closure or transfer of business, last periodic return to be filed from the first day of month/quarter/six month, as the case may be till the date of discontinuance of business.

Due date for filing returns:

Monthly and Quarterly Returns : 21 days from the end of month/quarter

Half Yearly Returns : 30 days from the end of six monthly period

Note: The returns, whether monthly, quarterly or six monthly have to be uploaded in electronic format only. A grace period of 10 days, from the end of prescribed due date, has been provided for uploading e-returns. 

(Refer Trade Circular Nos. 16T of 2008, dated 23rd April, 2008, 31T of 2008, dated 8th September, 2008 and 1T of 2009 dated 12th January, 2009). It has further been clarified through Trade Circular 15T of 2009, dated 21st April 2009 that even Nil payment returns and returns having refund claim or credit c/f can also be uploaded within this grace period of 10 days.

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.

As per Rule 17 of MVAT Rules, the Commissioner of Sales Tax is empowered to determine periodicity for different classes of dealers. Accordingly, the Sales Tax department determines, from time to time, periodicity of returns of all dealers and the same is made available on its website (mahavat.gov.in). The dealers are required to file return as per the periodicity determined by the department. If there is any mistake in it, the dealers are required to approach the concerned officer for correction. It may be noted that failure to file return as per prescribed periodicity, within the prescribed due date, attracts mandatory late fees of Rs. 5,000/- per return, w.e.f. 1st August 2012. (Earlier, there was a provision to levy penalty @ Rs. 5,000/- per return).

Concession in Late Fees

A dealer was liable to pay a Late Fee of Rs. 5,000/- on delayed return irrespective of period of delay. However, the provision was amended w.e.f. 1st July, 2014, whereby it was provided that if a dealer files return within 30 days from the prescribed due date of filing the return the late fee shall be Rs. 2,000/- . (It is further reduced to ₹ 1,000 w.e.f. 1st May 2015) and in all other cases it shall be Rs. 5,000/-. [Refer Trade Circular 6T of 2015 dated 14th May, 2015].

It may be noted that returns uploaded within the concessional period of 10 days from the due date (i.e. those returns where net tax payable is either nil or there is excess credit or the amount of tax payable has been paid before the prescribed due date but the return is uploaded witin 10 days from the prescribed due date) will continue to be considered as filed within the time and late fee is not payable in such cases. [Ref: Trade Circular 15T of 2014 dated 6th August, 2014].

To encourage those dealers, whose return/s for past period/s could not be uploaded due to any reason, an additional concession was granted in respect of all those returns which were due to be filed on or before 31st March 2014. Such dealers were permitted to upload their pending returns with a concessional rate of late fee of Rs. 1,000/- only in respect of each such return. Thus all pending returns, as on 1st April, 2014, were allowed to be filed along with payment of full tax and interest by paying late fee of Rs. 1,000 only, provided such returns were filed on or before 30-9-2014. It was also provided that if late fee is paid while filling such late return/s, the penalty levied earlier in respect of non-filling of such return/s will not be recovered. [Ref: Notification VAT 1514/CR-44/Taxation-1 dated 9th July 2014 and Trade Circular 13T of 2014 dated 2nd August 2014].

Late Fee Waiver: The Government of Maharashtra has issued a Notification dated 1st January, 2014 granting exemption from payment of Late Fees in certain specified circumstances. [Refer Notification VAT-1513/CR-124/ Taxation-1 dated 1st January 2014 and Trade Circular No. 8T of 2014, dated 11th March, 2014]

The Commissioner of Sales Tax, Maharashtra, vide Trade Circular No. 19T of 2012, dated 9th November, 2012, has clarified that if the due date falls on Sunday or Public Holiday then the compliance made on next working day immediately following the said Sunday or Public Holiday shall be considered as sufficient compliance within the prescribed time period for all the purposes of the Act.

E-Return Annexure

1. Regular Return Annexure

2. Annual E-Return Annexure

Regular Return Annexure

It is to be submitted by all the dealers, before uploading their periodic returns for all the periods commencing from 1st April, 2014. It is consisting of two annexures, commonly known as J-1 and J-2, wherein Tin wise details of all local sales and all local purchases respectively are to be reported.

It may be noted that this regular return annexure is to be submitted by those dealers also who have opted for any of the composition schemes. However, in case of those dealers who are covered by composition scheme/s for Retailers, Bakers, Restaurants, Second hand Motor Vehicle Dealers and Developers of 1% composition scheme are required to furnish information in Annexure J-2 only i.e. Tin wise details of local purchases. They need not to furnish information in J-1 i.e. in respect of sales.

(Refer Trade Circular No. 9T of 2014 dated 25th March, 2014 and Trade Circular No. 18T dated 26th September, 2014).

Annual E-Return Annexure

The dealers, who are not required to file audit report in Form 704, have to furnish certain information through Annual E-Return Annexure. It has to be submitted by all the dealers [except those who have opted for composition scheme/s under sub-sections (1), (2) and (3A) of section 42], who are not liable for VAT audit, u/s. 61 for relevant financial year. The due date for submission of Annual E-Return Annexure is within three months from the end of financial year (i.e. by 30th June). It may be noted that the return for the period ending March (whether monthly, quarterly or six monthly), in case of such dealers, can be filed only after uploading the said Annual E-Return Annexure. Accordingly, the due date for filing such return, in such cases, shall get extended up to 30th June. (Ref: Trade Circular No. 3T of 2012 dated 27th Feb., 2012.) This extension of due date, for last return of the financial year, is applicable only for submission of the return. The payment of tax, if any, has to be made as per the prescribed due date/s, as mentioned above according to the applicable periodicity.

It may further be noted that as annual E-Return Annexure is not applicable to those dealers, who have opted for composition schemes under section 42, sub-sections (1) i.e. Retailers, (2) i.e. hoteliers, caterers, bakers, & 2nd hand motor car dealers and (3A) i.e. builders/ developers, the due date for filing return for period ending 31st March shall remain same i.e. 21st April or 30th April as the case may be (as per table above).

This Annual E-Return Annexure is consisting of various sub-annexure commonly known as J-1, J-2, C, D, G, H and I). As information about local sale and purchase transactions, for all the periods of financial year 2014-15, is already reported through regular return annexure, the dealers need to report information, if any, for remaining sub-Annexures i.e. C, D, G, H and I. But, submission of annual e-return annexure is must for all those dealers who are not required to submit audit report in Form 704.

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 return 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 e-payment), 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 the dealers to make payment of taxes electronically.

In case of delayed payments, interest is payable @ 1.25% p.m. or part thereof. Such interest is mandatory and shall be paid before filing of return.

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 earlier provisions of MVAT Act, refund could not be adjusted against liability of the subsequent year; i.e., excess credit was not allowed to be carried forward to the next financial year. However, the Commissioner of Sales Tax was having powers to permit carry forward of refund of one financial year to the subsequent financial year. Accordingly, circulars were issued from time to time. The refunds relating to financial years 2005-06 and 2006-07 were permitted to be carried forward to subsequent financial year (without any monetary limit/s). And refunds for financial year/s 2009-10, 2010-11 and 2011-12 were also permitted to be carried forward to immediate succeeding financial year/s, subject to a ceiling of Rupees one lakh.

But, now section 50(2) of MVAT Act has been amended, (vide Maharashtra Act No. VIII of 2013), which provides that for the period commencing on or after 1st April, 2012, a dealer whose refund claim in a year is Rupees Five lakhs or less, may carry forward such refund to the return or revised return for immediate succeeding year to which such refund relates. Thus, excess credit if any (up to Rupees Five lakhs) in the return of the last period of a financial year can now be carried forward to next financial year. (Applicable for financial year 2012-13 and onwards)

Revised Returns

According to the amended provisions, if a dealer needs to file revised return/s, there may be three specified circumstances for which the conditions are as follows:

At his own  to rectify any mistake or omission  within 10 months from the end of financial year in which such tax period falls or before receipt of notice for assessment, whichever is earlier,

Due to Audit Report u/s. 61  to reflect the differences if any arising due to audit findings  within thirty days from the due date for submission of audit report, such a return has to be filed for the whole year (annual revised return having consolidated figures determined as per Form 704),

Due to Intimation u/s. 63  where the dealer agrees with the observations contained in the intimation issued by the Department within thirty days from the date of service of such intimation. This return shall also be one single return (annual revised return) for the whole year. [Refer Trade Cir No. 4T of 2013 dated 26th June, 2013]

It has further been provided that any such person or dealer cannot furnish more than one revised return under each of aforesaid clauses (a) to (c) and such revised return may include revision of original return or revised return filed earlier. [Section 20(4)] This sub-section has been amended w.e.f. 1st April, 2015, whereby the restriction of not more than one revised return is now removed in case of category (c) above. Thus, there can be multiple revised annual return/s, if so required, u/s 20(4)(c) of the MVAT Act. (Ref: Trade Circular 6T of 2015 dated 14th May, 2015).

Administrative Relief

The Commissioner of Sales Tax is empowered to grant administrative relief in cases of genuine hardship whether to a particular dealer or to a class of dealers or in general. Circulars to this effect have been issued from time-to-time. Some of these circulars are:

Trade Circular Nos. 36T of 2006 dated 28th November, 2006 for granting ADM relief due to disturbances caused by floods.

Trade Circular Nos. 33T of 2007 dated 18th April 2007 & 36T of 2009 dated 24th December, 2009 for granting ADM relief to unregistered dealer/s in case of late application for registration.

Trade Circular 17T of 2011, dated 25th November, 2011, regarding correction of mistakes (such as period, TIN, etc.) in the challans paid into the Government treasury and for miscellaneous refunds of excess payment of taxes.

Various Trade Circulars issued from time-to-time granting ADM relief to specific classes of dealers.

Trade Circulars 10T of 2012, dated 2nd July, 2012 granting ADM relief in respect of import/export licences, etc. covered by entry C-39 of the Schedule.

Trade Circulars 14T of 2012, dated 6th August, 2012, 17T of 2012, dated 25th September, 2012, 1T of 2013, dated 4th January, 2013 and Trade Circulars 1T, 2T, 6T, 7T, 10T and 12T of 2014, granting various ADM reliefs to builders & developers.

INPUT TAX CREDIT (ITC) (SET OFF): [Sec. 48, Rules 51 to 56]

Eligibility: All registered dealers, whether manufacturer or traders, are eligible to take full set off of the taxes paid on inputs; i.e., Value Added Tax paid, within the State of Maharashtra, on purchases of Raw Material, 

Finished Goods and Packing Material, or any goods debited to profit and loss account.

Entry Tax: The amount of entry tax, paid by a registered dealer on the goods the sale of which is liable for VAT under MVAT, will be eligible for full set off.

ITC on Capital Goods: Tax paid on certain items of capital goods (defined) such as machinery, components, parts and spares etc. are also eligible for full set off, (on certain other items of capital assets such as furniture and fixtures, office equipments, etc. set off is admissible, subject to retention @ 3%, w.e.f. 8-9-2006).

ITC on Miscellaneous Goods:  The amount of MVAT paid on purchase of miscellaneous goods, debited to Profit & Loss A/c. also eligible for full set-off.

ITC on Fuel:  Tax paid on purchase of goods, which is used as fuel, shall be eligible for set off, in excess of 3%.

Reduction in set-off: The amount of set off, available to a registered dealer, shall be reduced to the extent as provided, under the following circumstances:

i. 3% of the purchase price of respective goods, if taxable goods used as fuel.

ii. Natural Gas (In specified circumstances  reduction @ 3%.

iii. 2% of the purchase price of respective goods, if taxable goods used in manufacture of tax-free goods.

[No such reduction, if tax free goods so manufactured (covered by Schedule 'A') are exported out of India]. It is further provided, w.e.f. 1st May, 2012, that no reduction in this clause if goods manufactured is Sarki Pend or de-oiled cakes).

iv. 2% of the purchase price of respective packing material used in the packing of tax-free goods sold.

(No such reduction, if such tax free goods is covered by Schedule 'A' and the same are exported out of India.)

v. 4% of the purchase price of respective goods, if taxable goods sent to any other State in India as Branch Transfer or on Consignment. (Earlier the rate of reduction, in this clause, was 4% from 1-4-2005 to 31-3-2007, 3% from 1-4-2007 to 31-5-2008 and 2% from 1-6-2008 to 31-3-2012).

Provided that, if the rate of tax applicable, on the goods so purchased, for branch transfer outside the State, is less than 4% then rate of reduction shall be such lesser rate as specified in the Schedule for that goods.

Provided further that no such reduction, if such branch transferred goods is received back in the State within a period of 6 months, whether after processing or otherwise.

vi. In case the manufactured goods falls under Schedule entries D-5, D-6, D-7, D8 or D-9, and if such manufactured goods is stock-transferred outside the State then reduction @ 4% of the value of goods so dispatched outside the State. (The rate of reduction was 2% up to 31-3-2012.)

vii. Specified percentage of set off, if taxable goods used in Works Contract for which the dealer has chosen to pay tax under the Composition Scheme as provided in section 42(3). (Reduction @ 4% of purchase price in respect of goods used in notified construction contracts, and, @ 36% of eligible amount of set off in case of other contracts).

viii. In case of liquor, sold by dealers holding Liquor Vendor Licence in Form FL-II, CL-III, and CL/FL/TOD/III, as per formula, if the actual sale price is less than MRP. (Applicable up to 30-4-2011, refer Notification No. 1511/ CR-57/Taxation-1 dated 30-4-2011).

ix. In case of dealers, whose total receipts on account of sale are less than 50% of total gross receipts of business then set off restricted to corresponding purchases, which are sold within 6 months from the date of purchase. In case of hotels and clubs covered by this Rule, in addition to set off on goods sold as above, the set off will be available on capital assets and consumables pertaining to kitchen and service of foods and drinks. In case of Manufacturer of goods (not a job worker) covered by this Rule, set off can be claimed on plant and machinery & its PCA & packing materials only in respect of period of first 3 years from effective date of certificate of registration.

x. In case of closure of business, the set off on goods held in stock (other than capital assets), on the date of closure, to be disallowed and accordingly be reduced fully.

xi. 3% of the purchase price of office equipment, furniture & fixture treated by the claimant dealer as capital assets. This is not applicable to dealers who are in the business of leasing of these goods.

xii. 2% of purchase price of goods which are used in the distribution or transmission of electricity (including the goods treated as capital assets), if the claimant dealer is holding a licence for transmission or distribution of electricity under the Electricity Act, 2003. (The rate of reduction earlier was 4% up to 31-3-2007 and 3% from 1-4-2007 to 31-5-2008.)

xiii. Reduction @ 2% on purchase price of goods used in textile processing (property in which passes during the process resulting into works contract) and packing material.

Wherever such reduction in set off is required to be done, it shall be done in the tax period in which such contingency arises.

If, for the purpose of reduction of set off, wherever required, it is not possible to identify the corresponding purchases then proportionate reduction on FIFO basis.

Condition for grant of set-off

1. Set off to be allowed only to a registered dealer.
2. A valid Tax Invoice is must to claim set off.
3. Proper maintenance of account of all the purchases in a chronological order stating therein the date on which the goods so purchased, the name and registration number of the selling dealer, tax invoice number & date, the amount of purchase price paid and the amount of tax paid separately.
4. The set off on eligible goods, purchased on or after 1st April 2005, has to be claimed in the tax period in which the goods have been purchased (entered in the books of account).
5. In case of newly registered dealers, set-off can be claimed on the goods (including capital assets) purchased before the date of registration, within the same financial year, provided that the goods so purchased is not sold or disposed of before the date of registration. (Effective from 8-9-2006).
6. Tax on earlier transaction is received in Government Treasury.
7. The amount of set off on any purchase of goods shall not exceed the amount of tax in respect of same goods, actually paid, if any, under the MVAT Act, or any earlier law, into the Government treasury, except to the extent where purchase tax is payable by the claimant dealer on the purchase of the said goods effected by him. It has further been clarified through section 48(5) that where tax levied or leviable under MVAT Act or any earlier law is deferred or is deferrable under any Package Scheme of Incentives, implemented by the State Government, then the tax shall he deemed to have been received in the Government Treasury for this purpose.

No set off: No set off, under any Rule shall be admissible in respect of:

• Purchase of passenger motor vehicles and parts components and accessories thereof.
• Purchase of motor spirit (specified) by any dealer other than a dealer in motor spirit.
• Purchase of Crude Oil, used by an oil refinery for refining.
• Any purchase of consumables or capital assets by a job worker (pure labour job), whose only sales are waste or scrap of goods obtained from such labour job.
• Purchase of raw material made by a dealer holding Entitlement Certificate under a Package Scheme of Incentives. (Such units are entitled for refund of tax paid on purchases).
• Any purchase of goods of incorporeal or intangible nature other than:

1. Import licence, Export Permits/licences or Quota, etc., covered by Entries 3 & 4 of Notification issued under Schedule Entry C-39.
2. SIM cards
3. Software in the hands of a trader in Software.
4. Copyrights, if resold within 12 months from the date of purchase. Except above, all other intangible goods are debarred from set off.

• Tax paid on purchases by way of works contracts resulting in the erection of immovable property (other than plant & machinery).
• Purchases of any goods used in the erection of immovable property (other than plant & machinery). However, a contractor, who undertakes construction of immovable property by way of works contracts, is eligible to claim set off on purchase of such goods.
• Office Equipments, Furniture & Fixtures, Electric Installations, etc., (treated as capital assets), purchased during the period from 1-4-2005 to 7-9-2006. (Such assets, if purchased on or after 8-9-2006, are eligible for set off subject to retention @ 4% or 3% as the case may be).
• It may further be noted that:
• Small dealers/retailers, hoteliers, caterers, bakers, mandap decorators etc., opting for Composition Scheme, u/ss. 42(1), 42(2) and 42(4) of MVAT Act, are not entitled for any set-off. Similarly builders/developers, opting for composition scheme u/s. 42(3A) are also not entitled for any set off of taxes paid on their purchases.
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• There is no set-off of CST paid on inter-State purchases.
• There is no set-off for any other taxes paid such as excise duty, import duty, service tax, octroi or such other levy or levies.
• In case of hotelier, the set-off on capital assets is prohibited where such capital assets are not pertaining to sale or service of food/drinks.

Credit C/F and Credit B/F: If during a tax period (month/ quarter/six months) the tax on total turnover of sales is less than the amount of input tax credit, then such excess amount of credit may either be adjusted by the dealer against his tax liability under the CST Act for the same period or may be c/f to the next period. The unadjusted credit i.e. c/f of one period shall become the credit b/f for the next period. The excess credit may be carried forward in this manner till the end of the accounting year. The balance remaining at the end of financial year, if more than the permitted limit (at present rupees five lakhs), shall be claimed as a refund in Form 501 from the department, within a period of eighteen months from the end of the year for which it relates. However, if the excess credit at the end of financial year is within the permissible limit (up to rupees five lakhs), the dealer may opt either to carry forward it to the next financial year or claim refund by submitting Form 501 as per prescribed procedure.

Goods Return, Debit/Credit Notes: Sections 63(5) and (6) of the MVAT Act provides that the amount of goods returned during any period shall be reduced from the total turnover of sales/ purchase of that period in which the entries in respect of goods returned passed in the books of account, (provided that the goods has been returned within a period of six months from the date of sale or purchase thereof as the case may be). Similarly other debit and credit notes, which are in the nature of increasing or reducing the sale price and/or the purchase price shall be given effect in the month in which such debit/credit note has been entered in the books of account of the dealer. Thus the amount of set-off, for that period, shall get increased or reduced to the extent it related to purchase return and debit/credit notes having impact on the purchase price of goods.

Exports: Exports are treated as zero-rated. Thus no tax is payable on export of goods out of India. However full set-off is available of input tax paid on purchases, from within the State of Maharashtra, used in such exports. As there are no concessional forms under MVAT, the exporters may have to claim refund of the VAT paid on their purchases (inputs).

However, the trading exporters (who were earlier purchasing goods against Form 14B), may purchase such goods against Form H of CST Act, provided all other conditions of section 5(3) of CST Act are fulfilled.

Inter-State Sales: The transactions of inter-State sales and inter-State movement of goods are governed by the CST Act. Thus the tax on such sale is levied according to the provisions of CST Act. Such transactions are not liable for MVAT. However full input tax credit is available for the value added tax paid in Maharashtra. (Except in case of branch transfers/consignments, where there will be retention @ 4% or 3% or 2% as the case may be).