Maharashtra Value Added Tax - Incidence and levy of Tax

INTRODUCTION

The system of Value Added Tax (VAT) has been implemented, in the State of Maharashtra, w.e.f. 1st April, 2005.

INCIDENCE AND LEVY OF TAX

As per the provisions of Maharashtra Value Added Tax Act, 2002 (MVAT), 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:  [Sec. 3]

The dealers, holding a valid registration certificate under the earlier laws, whose turnover of either of sales or purchases exceeds the specified limits during the financial year 2004-05, shall be deemed to be registered dealer under MVAT Act and shall, therefore be liable to pay tax w.e.f. 1st April, 2005.

The dealers, holding a valid registration certificate under the earlier laws, whose turnover of either of sales or purchases has not exceeded the specified limits during the financial year 2004-05, but who have opted to continue their registration certificate (by applying to assessing officer in specified format), shall also be deemed to be registered dealer under MVAT Act and shall, therefore be liable to pay tax w.e.f. 1st April, 2005.

New dealers, whose turnover of sales exceeds the prescribed limits during any year, commencing on or after 1st April, 2005, are liable to pay tax from the date on which such limit exceeds.

It may be noted that there is a little change in section 3, w.e.f. 1st May 2012, the words turnover of sales for new dealers have been changed to turnover either of all sales or, as the case may be, purchases. This is due to introduction of concept of purchase tax in respect of certain goods specified under Sections 6A and 6B (i.e. mainly Cotton and Oilseeds). In case of such dealers only, the turnover of purchases of such notified goods to be considered for this purpose, from the date of notification in respect of liability to pay purchase tax u/ss. 6A and 6B. [Refer section 3(5A) and Trade Circular No. 13T of 2012 dated 6-8-2012.]

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.

Registration [Sec. 16, R 8]

Every dealer, who becomes liable to pay tax under the provisions of MVAT law, shall apply electronically for registration, within 30 days from the date of such liability. [In case of succession of business u/s. 8(3) i.e. succession due to death of proprietor, application can be filed within 60 days of date of succession].