SIRC of ICAI Chennai TNVAT AUDIT Sampathkumar.V.V · PDF fileAct,subjecttoclauses(a)and(b) ......

SIRC of ICAI SIRC of ICAI

Chennai

TNVAT AUDIT TNVAT AUDIT

Sampathkumar.V.V.Sampathkumar.V.V.

INPUT TAX CREDIT INPUT TAX CREDIT INPUT TAX CREDIT INPUT TAX CREDIT ALLOWED on tax paid or ALLOWED on tax paid or payablepayablepayablepayableIf If Purchases Purchases If If Purchases Purchases are from are from registeredregistered dealerdealerare from are from registeredregistered dealerdealer

of of taxable goodstaxable goods in in FirstFirst ScheduleSchedule

insideinside the State andthe State andinsideinside the State andthe State and

tax payment is established in the tax payment is established in the tax payment is established in the tax payment is established in the

prescribedprescribed mannermanner..prescribedprescribed mannermanner..

Section 19: input tax credit

(2) Input tax credit shall be allowed for the purchase of goods made within the

State from registered dealer and which are for the purpose of -State from registered dealer and which are for the purpose of -

i. re-sale by him within the State; or

ii. use as input in manufacturing or processing of goods in the State; or

iii. use as containers, labels and other materials for packing of goods in theiii. use as containers, labels and other materials for packing of goods in the

State; or

iv. use as capital goods in the manufacture of taxable goods.

v. Sale in the course of inter-State trade or commerce falling under sub-v. Sale in the course of inter-State trade or commerce falling under sub-section (1) of section 8 of the Central Sales Tax Act 1956

vi. Agency transactions by the principal in the manner as may be prescribed

Provided that the reversal of ITC has to be made at 3% for sales fallingunder section 19(2)(v) effective from 11/11/13

SAMPATHKUMAR V V SAMPATHKUMAR V V 26 September 2014 3

3(a) Every registered dealer, in respect of purchases of capital goods whollyfor use in the course of business of taxable goods, shall be allowed inputfor use in the course of business of taxable goods, shall be allowed input

tax credit.

(b) Deduction of such input tax credit shall be allowed only after the(b) Deduction of such input tax credit shall be allowed only after the

commencement of commercial; production and over a period of three years in

the manner as may be prescribed. After the expiry of three years, the unavailed

input tax credit shall lapse to Government.input tax credit shall lapse to Government.

(c) Input tax credit shall be allowed for the tax paid under section 12 of theAct, subject to clauses (a) and (b) of this sub- section.

4. Input tax credit shall be allowed on tax paid or payable in the State on the

purchase of goods, in excess of four percent of tax relating to such purchases

––

( i) for transfer to a place outside the place otherwise than by way of sale; or

(ii) for use in manufacture of other goods and transfer to a place outside the(ii) for use in manufacture of other goods and transfer to a place outside the

State, otherwise than by way sale.

Provided that if a dealer has already availed input tax credit there shall be

reversal of credit against such transfer.


5(a) No input tax credit shall be allowed in respect of sale of goodsexempted under section 15exempted under section 15

(b) No input tax credit shall be allowed on tax paid or payable in otherStates or union territories on goods brought into this State from outside the

State.State.

(c) No input tax credit shall be allowed on the purchase of goods sold in the

course of interstate trade or commerce falling under sub-section (2) of

section 8 of the Central Sales Tax, 1956.section 8 of the Central Sales Tax, 1956.

(6) No input tax credit shall be allowed on purchase of capital goods, which

are used in the manufacture of goods exempted under section 15.

(7) No registered dealer shall be entitled to input tax credit in respect of—

goods purchased and accounted for in business but utilised for the purposeof providing facility to the proprietor or partner or director includingof providing facility to the proprietor or partner or director includingemployees and in any residential accommodation; or

(b) purchase of all automobiles including commercial vehicles, two wheelers

and three wheelers and spare parts for repair and maintenance thereof,and three wheelers and spare parts for repair and maintenance thereof,unless the registered dealer is in the business of dealing in such automobiles or

spare parts; or

(c) purchase of air conditioning units unless the registered dealer is in the


(c) purchase of air conditioning units unless the registered dealer is in the

business of dealing in such units.

(8) No input tax credit shall be allowed to any registered dealer in respect of

any goods purchased by him for sale but given away by him by way of freeany goods purchased by him for sale but given away by him by way of freesample or gift or goods consumed for personal use.

(9) No input tax credit shall be available to a registered dealer for tax paid or(9) No input tax credit shall be available to a registered dealer for tax paid or

payable at the time of purchase of goods, if such-

(i) goods are not sold because of any theft, loss or destruction, for any reason,(i) goods are not sold because of any theft, loss or destruction, for any reason,

including natural calamity. If a dealer has already availed input tax credit against

purchase of such goods, there shall be reverse credit; or

(ii) inputs destroyed in fire accident or lost while in storage even before use

in the manufacture of final products; or

(iii) inputs damaged in transit or destroyed at some intermediary stage of

manufacture.

(10) (a) The registered dealer shall not claim input tax credit until the dealer

receives an original Tax Invoice duly filled, signed and issued by a registered

dealer from whom the goods are purchased, containing such particulars, asdealer from whom the goods are purchased, containing such particulars, as

may be prescribed, of the sale evidencing the amount of input tax.

(b) If the original tax invoice is lost, input tax credit shall be allowed only on

the basis of duplicate/ carbon copy of such tax invoice obtained from the


the basis of duplicate/ carbon copy of such tax invoice obtained from the

selling dealer subject to such conditions as may be prescribed.

(11) In case any registered dealer fails to claim input tax credit in respect of any

transaction of taxable purchase in any month, he shall make the claim before thetransaction of taxable purchase in any month, he shall make the claim before the

end of the financial year or before ninety days from the date of purchase,

whichever is later.(12) Where a dealer has availed credit on inputs and when the finished goods(12) Where a dealer has availed credit on inputs and when the finished goodsbecome exempt, credit availed on inputs used therein shall be reversed.

(13) Where a registered dealer without entering into a transaction of sale,

issues a invoice, bill or cash memorandum to another registered dealer, with theissues a invoice, bill or cash memorandum to another registered dealer, with theintention to defraud the Government revenue, the assessing authority shall,

after making such enquiry as it thinks fit and giving a reasonable opportunity of

being heard, deny the benefit of input tax credit to such registered dealer who

has claimed input tax credit based on such invoice, bill or cash memorandumhas claimed input tax credit based on such invoice, bill or cash memorandum

from such date.

(14) Where the business of a registered dealer is transferred on account of

change in ownership or on account of sale, merger, amalgamation, lease orchange in ownership or on account of sale, merger, amalgamation, lease or

transfer of the business to a joint venture with the specific provision for transfer of

liabilities of such business, then, the registered dealer shall be entitled totransfer the input tax credit lying unutilized in his accounts to suchtransfer the input tax credit lying unutilized in his accounts to such

transferred, sold, merged, leased or amalgamated concern. The transfer of input

tax credit shall be allowed only if the stock of inputs, as such, or in process, or the

capital goods is also transferred to the new ownership on which credit has been

availed of are duly accounted for, in the manner as may be prescribed.


availed of are duly accounted for, in the manner as may be prescribed.

(15) Where a registered dealer has purchased any taxable goods from another

dealer and has availed input tax credit in respect of the said goods and if thedealer and has availed input tax credit in respect of the said goods and if the

registration certificate of the selling dealer is cancelled by the appropriate

registering authority, such registered dealer, who has availed by way of input tax

credit, shall pay the amount availed on the date from which the order ofcredit, shall pay the amount availed on the date from which the order of

cancellation of the registration certificate takes effect. Such dealer shall be liable

to pay, in addition to the amount due, interest at the rate of one and a quarterper cent, per month, on the amount of tax so payable, for the periodper cent, per month, on the amount of tax so payable, for the period

commencing from the date of claim of input tax credit by the dealer to the date of

its payment.

(16) The input tax credit availed by any registered dealer shall be onlyprovisional and the assessing authority is empowered to revoke the same if it

appears to the assessing authority to be incorrect, incomplete or otherwise not inappears to the assessing authority to be incorrect, incomplete or otherwise not in

order.

(17) If the input tax credit determined by the assessing authority for a year

exceeds tax liability for that year, the excess may be adjusted against any

outstanding tax due from the dealer.


(18) The excess input tax credit, if any, after adjustment under sub-section (17),

shall be carried forward to the next year or refunded, in the manner, as may beshall be carried forward to the next year or refunded, in the manner, as may be

prescribed.

(19) Where any registered dealer has availed input tax credit and has goods(19) Where any registered dealer has availed input tax credit and has goods

remaining unsold at the time of stoppage or closure of business, the amount of

tax availed shall be reversed on the date of stoppage or closure of such and

recovered.recovered.

(20) Notwithstanding anything contained in the section where any registered dealer

has soldsold goods at a priceprice lesserlesser thanthan thethe priceprice ofof thethe goodsgoods purchasedpurchased by him, the

amount of the input tax credit over and above the output tax of those goods shall beamount of the input tax credit over and above the output tax of those goods shall be

reversed.


NO INPUT TAX CREDIT ONNO INPUT TAX CREDIT ON••Purchase of goods relating to sale of Purchase of goods relating to sale of II II schsch goods goods S 19(1), Pr S 3(5)S 19(1), Pr S 3(5)••Purchase of goods relating to sale of Purchase of goods relating to sale of II II schsch goods goods S 19(1), Pr S 3(5)S 19(1), Pr S 3(5)

••Purchase of any Purchase of any automobilesautomobiles etc., etc., -- S19(7)(b). S19(7)(b). ExceptionException dealer itdealer it

••Purchase of any Purchase of any airair--conditioning units conditioning units -- S19(7)(c)S19(7)(c) ExceptionException dealer A/cdealer A/c••Purchase of any Purchase of any airair--conditioning units conditioning units -- S19(7)(c)S19(7)(c) ExceptionException dealer A/cdealer A/c

••Inputs purchased & a/Inputs purchased & a/ctdctd in business & used by proprietor/ partner/ in business & used by proprietor/ partner/

directors/ employee & in residence.directors/ employee & in residence.--S19(7)(a)S19(7)(a)

••Goods Goods purchased for sale & givenpurchased for sale & given as sample/gift/personal use as sample/gift/personal use --S19(8)S19(8)••Goods Goods purchased for sale & givenpurchased for sale & given as sample/gift/personal use as sample/gift/personal use --S19(8)S19(8)

••Goods not sold due to theft, loss, destruction etc.,Goods not sold due to theft, loss, destruction etc.,-- S19(9)(S19(9)(ii))

••Goods destroyed in fire accident, lost in storage Goods destroyed in fire accident, lost in storage b4 b4 use in mfg use in mfg S19(9)(ii)S19(9)(ii)

••Inputs damaged in transit or Inputs damaged in transit or destroyed dg Mfrdestroyed dg Mfr.S19 (9)(iii).S19 (9)(iii)••Inputs damaged in transit or Inputs damaged in transit or destroyed dg Mfrdestroyed dg Mfr.S19 (9)(iii).S19 (9)(iii)

••Purchase of goods used as Purchase of goods used as containers of exempted containers of exempted goods S 3(7)goods S 3(7)

••Invoice issued by a “bill trader” S(19)(12)Invoice issued by a “bill trader” S(19)(12)

••Invoice which is not original of “tax invoice” S 19(10) (a)Invoice which is not original of “tax invoice” S 19(10) (a)••Invoice which is not original of “tax invoice” S 19(10) (a)Invoice which is not original of “tax invoice” S 19(10) (a)

••Purchase inv in which Purchase inv in which Tax not charged separately Tax not charged separately S2(36) & 19(10)(a)S2(36) & 19(10)(a)

••ITC on Purchases, if not claimed ITC on Purchases, if not claimed before the endbefore the end of year or of year or 90 days90 days from from

date of purchase whichever is later.date of purchase whichever is later.date of purchase whichever is later.date of purchase whichever is later.


REVERSAL OF TAX CREDITREVERSAL OF TAX CREDIT••Purchase Returns Purchase Returns

••Sale of exempted goods Sale of exempted goods --IV SchIV Sch-- S 15 [S19(5) (a)]S 15 [S19(5) (a)]

••ITC availed & not sold at time of Stoppage of business ITC availed & not sold at time of Stoppage of business -- S19(19)S19(19)

••Stock tfr / consignment tfr (4/3%) Stock tfr / consignment tfr (4/3%) -- S19(4)S19(4)

••Price variationsPrice variations••Price variationsPrice variations

••Goods lost, stolen, destroyed & not sold.Goods lost, stolen, destroyed & not sold.

••Goods issued as free, gift and samples.Goods issued as free, gift and samples.

••Theft, loss, natural calamity.Theft, loss, natural calamity.••Theft, loss, natural calamity.Theft, loss, natural calamity.

••Input destroyed in fire or during process/mfgInput destroyed in fire or during process/mfg

••Unavailed credit on capital goodsUnavailed credit on capital goods

••Inputs destroyed in transit.Inputs destroyed in transit.••Inputs destroyed in transit.Inputs destroyed in transit.

••Capital goods used for mfg exempted goods.Capital goods used for mfg exempted goods.

••InterInter––State sales not covered by forms.State sales not covered by forms.

••Personal use of goods by director etc.,Personal use of goods by director etc.,••Personal use of goods by director etc.,Personal use of goods by director etc.,

••On inputs if On inputs if Finished goodsFinished goods subsequently exempted subsequently exempted --S19(12)S19(12)

••Bogus purchases (bill traders)Bogus purchases (bill traders)

••Suppliers registration cancelledSuppliers registration cancelled--S19(15)S19(15)••Suppliers registration cancelledSuppliers registration cancelled--S19(15)S19(15)

••Tfr/sale of business not as a wholeTfr/sale of business not as a whole

••Unutilised ITC of stock inventory within 6 months.Unutilised ITC of stock inventory within 6 months.

••Tax inv lost/misplaced & carbon copy not given in time or if AO rejects claimTax inv lost/misplaced & carbon copy not given in time or if AO rejects claim

SAMPATHKUMAR V V SAMPATHKUMAR V V

••Tax inv lost/misplaced & carbon copy not given in time or if AO rejects claimTax inv lost/misplaced & carbon copy not given in time or if AO rejects claim

ITC REVERSAL WORKINGS

PurchasesPurchases SalesSalesPurchasesPurchases SalesSales

TAX RATETAX RATE TURNOVERTURNOVER INPUT TAX INPUT TAX TURNOVERTURNOVER OUTPUT OUTPUT

5% 5% 4,00,0004,00,000 20,00020,000 5,00,0005,00,000 25,00025,000

14.5%14.5% 2,00,0002,00,000 29,00029,000 3,00,0003,00,000 43,50043,500

ExempteExempted d

NILNIL NILNIL 1,00,0001,00,000 NILNILd d

Stk TfrStk Tfr NILNIL NILNIL 1,00,0001,00,000 NILNIL

TOTAL TOTAL 6,00,0006,00,000 49,00049,000 10,00,00010,00,000 68,50068,500TOTAL TOTAL 6,00,0006,00,000 49,00049,000 10,00,00010,00,000 68,50068,500

••ITC REVERSAL ITC REVERSAL EXEMPTED SALESEXEMPTED SALES:: 4900049000/1000000*/1000000*100000100000 = 4900= 4900••ITC REV: ITC REV: STK TFRSTK TFR 5% GOODS: 5% GOODS: 4,00,0004,00,000 25000/25000/10000001000000**100000100000= 2500= 2500••STK TFR REVERSAL IS 3% = 2500/STK TFR REVERSAL IS 3% = 2500/5%5%*3% = 1500*3% = 1500••14.5% GOODS: Rs 2,00,000 14.5% GOODS: Rs 2,00,000 ITC 3% PORTION 200000*3% = 6000ITC 3% PORTION 200000*3% = 6000•• ITC 11.5% PORTION 200000*11.5% = 23000 ITC 11.5% PORTION 200000*11.5% = 23000 ••PROPORTIONATE REVERSAL OF 3% 6000*PROPORTIONATE REVERSAL OF 3% 6000*100000100000//1000000 1000000 = 600 = 600 •• Total reversal 4,900 + 1500 + 600 = Total reversal 4,900 + 1500 + 600 = 70007000••TOTAL VAT PAYABLE: TOTAL VAT PAYABLE: 68500 68500 -- ((4900049000--70007000) =26500) =26500

SAMPATHKUMAR.V.V.SAMPATHKUMAR.V.V.SAMPATHKUMAR.V.V.SAMPATHKUMAR.V.V.

26 September 2014 12

WORKS CONTRACT ASSESSMENT - THREE METHODS •1.Material identification (Regular Method) S5 ReconciliationTO?TO?•Tax on goods, deemeddeemed salesale valuevalue, ITC √, Tax can be collected•2. Compounding system payment of tax S6

••Tax on contract price, No ITC, No I/s Purchase, No Imports,

•Tax cannot be collected.S6 restriction is dealer or WC dealer or WC specific ?

•Option to be filed with first monthly return for year or after•Option to be filed with first monthly return for year or aftercommencement of the contract in the next return.

•Option exercised is final for that yearthat year

••Option exercised is final for that yearthat year

•No need to maintain accounts except

•a.Original of Works contract,

•b.extent of execution of work &•b.extent of execution of work &

•c.payment received

•Rate of VAT 2% Civil WCT and 5% Non civil WCT•Rate of VAT 2% Civil WCT and 5% Non civil WCT•3.Specified % of Deduction method R8(5)


26 September 2014 13

S. S. Labour or other charges Labour or other charges

WORKS CONTRACT ASSESSMENT

S. S.

No`No` Types of WCTypes of WCLabour or other charges Labour or other charges as a percentage value of as a percentage value of

the WCthe WC

11 Electrical ContractsElectrical Contracts 1515

22 All Structural All Structural 151522 All Structural All Structural ContractsContracts

1515

33 Sanitary ContractsSanitary Contracts 252533 Sanitary ContractsSanitary Contracts 2525

44 Watch and / or clock Watch and / or clock repairs Contractsrepairs Contracts

5050repairs Contractsrepairs Contracts

55 Dyeing ContractsDyeing Contracts 5050

66 All other ContractAll other Contract 3030


TNVAT 2006

••TURNOVERTURNOVER = = TNVATTNVAT + + CSTCST••TURNOVERTURNOVER = = TNVATTNVAT + + CSTCST

••TNVATTNVAT = = (1) (1) TaxableTaxable Purchases + Purchases + (2) Taxable Sales + (2) Taxable Sales + (3) Exempted(3) Exempted(2) Taxable Sales + (2) Taxable Sales + (3) Exempted(3) Exempted

••CST CST = (4) Taxable+ = (4) Taxable+ (5) Exempted(5) Exempted


15

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS••••Section Section 6363--AA: Accounts to be audited in certain cases by : Accounts to be audited in certain cases by Registered DealersRegistered Dealers

••Total turnoverTotal turnover* in a year * in a year exceedsexceedsRs one crore Rs one crore (TNVAT + CST)(TNVAT + CST)••Total turnoverTotal turnover* in a year * in a year exceedsexceedsRs one crore Rs one crore (TNVAT + CST)(TNVAT + CST)

Turnover = Taxable ( Turnover = Taxable ( purchasespurchases + sales) + + sales) + ExemptedExempted

••shall get his accounts, audited by an shall get his accounts, audited by an AccountantAccountant and and ••shall get his accounts, audited by an shall get his accounts, audited by an AccountantAccountant and and

••submit a submit a report report of such audit in the of such audit in the Form WWForm WW

••duly duly signed and verified signed and verified by the Accountant to the Assessing authorityby the Accountant to the Assessing authority••duly duly signed and verified signed and verified by the Accountant to the Assessing authorityby the Accountant to the Assessing authority

••within within NINE NINE months from the end of the financial yearmonths from the end of the financial year

••*Total*Total turnoverturnover includesincludes ZeroZero--raterate salesale andand SaleSale inin thethe coursecourse ofof interinter--StateState tradetrade••*Total*Total turnoverturnover includesincludes ZeroZero--raterate salesale andand SaleSale inin thethe coursecourse ofof interinter--StateState tradetrade

oror commercecommerce asas perper sectionsection 33 ofof thethe CSTCST ActAct 19561956


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TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONSIf the Registered Dealer If the Registered Dealer If the Registered Dealer If the Registered Dealer

failsfails to get his accounts audited and submit a report of such audit to get his accounts audited and submit a report of such audit

within 7 months from the end of the year within 7 months from the end of the year

the AO may direct the RD to pay the AO may direct the RD to pay penalty penalty of of Rs 10,000/Rs 10,000/--

in addition to any tax payable, in respect of the said period.in addition to any tax payable, in respect of the said period.

Audit Audit is is not applicable not applicable to to

departments of Central and State Governments, departments of Central and State Governments,

local authorities, local authorities, local authorities, local authorities,

railway administration as defined under the Railways Act, 1989, railway administration as defined under the Railways Act, 1989,

Tamil Nadu State Road Transport Corporations and Tamil Nadu State Road Transport Corporations and

similar such similar such registered dealers, as may be registered dealers, as may be notifiednotified by the Governmentby the Governmentsimilar such similar such registered dealers, as may be registered dealers, as may be notifiednotified by the Governmentby the Government

RULE 16A, RULE 16A, form WW & form WW & amendment to form RR amendment to form RR notified in GO Ms 119 dated 300812notified in GO Ms 119 dated 300812

Rule 16A Rule 16A RD liable to get his accounts audited as per S63A(1)RD liable to get his accounts audited as per S63A(1)Rule 16A Rule 16A RD liable to get his accounts audited as per S63A(1)RD liable to get his accounts audited as per S63A(1)

Furnish report Furnish report in duplicate in duplicate in in form WW form WW

Time limit Time limit SEVENSEVEN months from the end of the yearmonths from the end of the year


17

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS••WhetherWhether VATVAT AuditAudit isis toto bebe completedcompleted firstfirst oror thethe finalizationfinalization ofof accountsaccounts oror••WhetherWhether VATVAT AuditAudit isis toto bebe completedcompleted firstfirst oror thethe finalizationfinalization ofof accountsaccounts ororTaxTax AuditAudit asas perper IncomeIncome TaxTax ActAct 19611961 ??

••Consider the following and state whether it is an Consider the following and state whether it is an auditable entity or notauditable entity or not??

••If the turnover of a dealer A as per trading account is If the turnover of a dealer A as per trading account is Rs 95 lakhs Rs 95 lakhs ••If the turnover of a dealer A as per trading account is If the turnover of a dealer A as per trading account is Rs 95 lakhs Rs 95 lakhs

••If the Turnover of the dealer A is If the Turnover of the dealer A is Rs 110 Lakhs Rs 110 Lakhs

••TurnoverTurnover ofof aa manufacturermanufacturer MM asas perper booksbooksRsRs 9292 LakhsLakhs••TurnoverTurnover ofof aa manufacturermanufacturer MM asas perper booksbooksRsRs 9292 LakhsLakhs••EntireEntire salessales ofof companycompany EE isis exportsexports oror exemptedexempted turnoverturnover

••OneOne cannotcannot makemake aa salesale toto himselfhimself whenwhen goodsgoods areare despatcheddespatched && whenwhen goodsgoodsareare sentsent toto sellingselling agentagent.. WhetherWhether thethe goodsgoods sentsent toto branchesbranches situatedsituated inin otherotherareare sentsent toto sellingselling agentagent.. WhetherWhether thethe goodsgoods sentsent toto branchesbranches situatedsituated inin otherotherStatesStates andand goodsgoods consignedconsigned toto sellingselling agentagent isis toto bebe partpart ofof “Turnover”“Turnover” forfor thethepurposespurposes ofof salessales taxtax lawlaw..


18

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS

TNVAT Audit QuestionnaireTNVAT Audit Questionnaire


19

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS

FORM FORM -- WWWW

[See rule 16[See rule 16--A]A]

Audit Report under section 63Audit Report under section 63--A of the Tamil NaduA of the Tamil NaduAudit Report under section 63Audit Report under section 63--A of the Tamil NaduA of the Tamil Nadu

Value Added Tax Act, 2006Value Added Tax Act, 2006

CertifiedCertified thatthat II // wewe beingbeing aa CharteredChartered AccountantAccountant // CostCostAccountantAccountant havehave auditedaudited thethe accountsaccounts ofof (Name(Name andand addressaddressofof thethe dealer)dealer) havinghaving registrationregistration numbernumber (TIN)(TIN)AccountantAccountant havehave auditedaudited thethe accountsaccounts ofof (Name(Name andand addressaddressofof thethe dealer)dealer) havinghaving registrationregistration numbernumber (TIN)(TIN)………………………………………………..forfor thethe yearyear endingending 3131ststMarchMarch …………andandsubjectsubject toto mymy // ourour observationsobservations andand commentscomments aboutabout nonnon--subjectsubject toto mymy // ourour observationsobservations andand commentscomments aboutabout nonnon--compliancecompliance,, shortcomingsshortcomings andand deficienciesdeficiencies inin thethe returnsreturnsfiledfiled byby thethe dealer,dealer, asas givengiven inin thethe attachedattached reportreport,,filedfiled byby thethe dealer,dealer, asas givengiven inin thethe attachedattached reportreport,,

..


20

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS••FormFormWWWW prescribedprescribed whichwhich amongamong othersothers ,to,to containcontain whetherwhether••FormFormWWWW prescribedprescribed whichwhich amongamong othersothers ,to,to containcontain whetherwhether

••BooksBooks ofof accountsaccounts // recordsrecords andand registersregisters maintainedmaintained areare sufficientsufficient forforverifyingverifying thethe correctnesscorrectness andand completenesscompleteness ofof thethe returnsreturns filedfiledverifyingverifying thethe correctnesscorrectness andand completenesscompleteness ofof thethe returnsreturns filedfiled

••ReturnsReturns filedfiled includesincludes allall salessales effectedeffected

••ReturnsReturns filedfiled includesincludes allall purchasespurchases effectedeffected

••••SalesSales returnsreturns claimedclaimed isis asas perper lawlaw

••AdjustmentAdjustment ofof TOTO ofof salessales // purpur isis asas perper entriesentries passedpassed inin booksbooks ofof A/cA/c..

••ClassificationClassification ofof goodsgoods soldsold,, raterate ofof VAT,VAT, computationcomputation ofof outputoutput taxtax &&••ClassificationClassification ofof goodsgoods soldsold,, raterate ofof VAT,VAT, computationcomputation ofof outputoutput taxtax &&netnet taxtax payablepayable shownshown inin thethe returnsreturns areare correctcorrect

••ClassificationClassification ofof goodsgoods PurchasedPurchased,, amountamount ofof inputinput taxtax paid,paid, deductiondeductionofof inputinput taxtax claimedclaimed && reversedreversed isis correctcorrect && inin conformityconformity withwith lawlawofof inputinput taxtax claimedclaimed && reversedreversed isis correctcorrect && inin conformityconformity withwith lawlaw

••UtilisationUtilisation ofof statutorystatutory formsforms isis validvalid purposespurposes asas perper TNVATTNVAT // CSTCST

••OtherOther infoinfo givengiven inin returnsreturns isis correctcorrect andand completecomplete••OtherOther infoinfo givengiven inin returnsreturns isis correctcorrect andand completecomplete


21

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONSAnnexure Annexure Annexure Annexure

Part APart A

GENERAL INFORMATIONGENERAL INFORMATION

1.1. Name of the dealerName of the dealer1.1. Name of the dealerName of the dealer

2.2. Taxpayer Identification No (TIN)Taxpayer Identification No (TIN)

3.3. CST registration NoCST registration No

4.4. Address (Within TN) Address (Within TN) Principal place of business Principal place of business and and other places other places 4.4. Address (Within TN) Address (Within TN) Principal place of business Principal place of business and and other places other places

5.5. Nature of business Nature of business Mfr/ Mfr/ TraderTrader//WCWC/Lessor//Lessor/AgentAgent//HotelierHotelier/ Others (/ Others (SpecifySpecify))

6.6. Constitution of businessConstitution of business

7.7. Name,Address of propr/Partners/Directors as on 31.03.,,,,,Name,Address of propr/Partners/Directors as on 31.03.,,,,,Sl # Sl # Name & adr Name & adr DesignnDesignn

8.8. Details of Regns with other deptmnts : Details of Regns with other deptmnts : ITPANITPAN, CE, , CE, Serv TxServ Tx, IE & , IE & CINCIN

9.9. Bank accounts : Name of Bank accounts : Name of Bank & Bank & BranchBranch & Account number & Account number

10.10. List of books List of books of accounts of accounts maintainedmaintained

11.11. List of books List of books of accounts of accounts examined examined


22

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONSAnnexure Part B Computation of TNVAT TurnoverAnnexure Part B Computation of TNVAT Turnover

13 Computation of Turnover Assessable under the Tamil Nadu 13 Computation of Turnover Assessable under the Tamil Nadu Value Added Tax Act 2006Value Added Tax Act 2006

CategoryCategory(1)(1)

TurnoverTurnover(2)(2)

Rate of TaxRate of Tax(3)(3)

TaxTax(4)(4)

(In Rs)(In Rs) (In % )(In % ) (in Rs)(in Rs)

(i)(i) First ScheduleFirst Schedule--Part APart A

(ii)(ii) First ScheduleFirst Schedule--Part BPart B(ii)(ii) First ScheduleFirst Schedule--Part BPart B

(iii)(iii) First ScheduleFirst Schedule--Part CPart C

(iv)(iv) Works contract Works contract TOTO undeunder S6r S6**

(v)(v) Turnover under section Turnover under section 7(1)(a)7(1)(a)(v)(v) Turnover under section Turnover under section 7(1)(a)7(1)(a)

*Mention the rate of tax*Mention the rate of tax


23






TaxTax(4)(4)

(In Rs)(In Rs) (In % )(In % ) (in Rs)(in Rs)(In Rs)(In Rs) (In % )(In % ) (in Rs)(in Rs)(vi)(vi) Turnover under sectionTurnover under section 7(1)(b)7(1)(b)(vii)(vii) Goods sold at a Goods sold at a concessional rate concessional rate of of

tax (covered by a notification)tax (covered by a notification)**tax (covered by a notification)tax (covered by a notification)**

(viii)(viii) Second Schedule Second Schedule GoodsGoods**@@(ix)(ix) Others,Others, if any, specify if any, specify **@@(A)(A) Total Sales Turnover liable to tax Total Sales Turnover liable to tax (A)(A) Total Sales Turnover liable to tax Total Sales Turnover liable to tax

under Tamil Nadu Value Added under Tamil Nadu Value Added Tax Act 2006Tax Act 2006{(i) to (ix)}{(i) to (ix)}*Mention the rate of tax*Mention the rate of tax*Mention the rate of tax*Mention the rate of tax@ Provide the description of goods@ Provide the description of goods


24





Rate of Rate of TaxTax(3)(3)

TaxTax(4)(4)

(3)(3)

(In Rs)(In Rs) (In % )(In % ) (in Rs)(in Rs)(x)(x) Purchase liable to be taxed under Purchase liable to be taxed under secsec 1111

(xi)(xi) Purchase liable to be taxed under Purchase liable to be taxed under sec 12sec 12(xi)(xi) Purchase liable to be taxed under Purchase liable to be taxed under sec 12sec 12

(B)(B) Total Purchase Turnover liable to tax Total Purchase Turnover liable to tax under Tamil Nadu Value Added Tax under Tamil Nadu Value Added Tax Act 2006{(x) + (xiAct 2006{(x) + (xi)})}Act 2006{(x) + (xiAct 2006{(x) + (xi)})}

(C)(C) Total Taxable Turnover Total Taxable Turnover Under Under Tamil Tamil Nadu Value Added Act Nadu Value Added Act 2006 {(2006 {(A) + (B)}A) + (B)}


25

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS13 Computation of Turnover Assessable under the Tamil Nadu 13 Computation of Turnover Assessable under the Tamil Nadu

Annexure Part B Computation of TNVAT TurnoverAnnexure Part B Computation of TNVAT Turnover13 Computation of Turnover Assessable under the Tamil Nadu 13 Computation of Turnover Assessable under the Tamil Nadu

Value Added Tax Act 2006Value Added Tax Act 2006

CategoryCategory TurnoverTurnover Rate of TaxRate of Tax TaxTaxCategoryCategory(1)(1)



TaxTax(4)(4)

(In Rs)(In Rs) (In % )(In % ) (in Rs)(in Rs)

(xii)(xii) Turnover within the State, of goods Turnover within the State, of goods (xii)(xii) Turnover within the State, of goods Turnover within the State, of goods specified in the specified in the Fourth Schedule Fourth Schedule to the to the Tamil Nadu Value Added Tax Act, 2006@Tamil Nadu Value Added Tax Act, 2006@

(xiii)(xiii) Turnover within the State, of goods which Turnover within the State, of goods which (xiii)(xiii) Turnover within the State, of goods which Turnover within the State, of goods which are are exempted by Notification exempted by Notification @@

(xiv)(xiv) ZeroZero--rated sales rated sales within the Statewithin the State

(xv)(xv) Others, if any, specifyOthers, if any, specify(xv)(xv) Others, if any, specifyOthers, if any, specify

(D)(D) Total Total Exempted Exempted Turnover Turnover {({(xii) to (xv)}xii) to (xv)}

TOTAL TURNOVER under Tamil Nadu TOTAL TURNOVER under Tamil Nadu Value Added Tax Act, 2006{(C) + (D)}Value Added Tax Act, 2006{(C) + (D)}Value Added Tax Act, 2006{(C) + (D)}Value Added Tax Act, 2006{(C) + (D)}

@ Provide the description of goods@ Provide the description of goods


26

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONSAnnexure Part B Annexure Part B Annexure Part B Annexure Part B

1313 Computation of PurchasesComputation of Purchases Value in Value in (Rs)(Rs)

Value Added Tax Value Added Tax paidpaid(in (in Rs)Rs)

(a)(a)(a)(a)(i)(i) Registered Compounding DealersRegistered Compounding Dealers(ii)(ii) Registered Annual Return FilersRegistered Annual Return Filers(iii)(iii)Other Registered Dealers Other Registered Dealers **(iii)(iii)Other Registered Dealers Other Registered Dealers **(iv)(iv)Unregistered DealersUnregistered Dealers

(b)(b) InterInter--State PurchasesState Purchases(c)(c) Imports into Imports into IndiaIndia(c)(c) Imports into Imports into IndiaIndia(d)(d) InterInter--State Stock Transfer (inward)State Stock Transfer (inward)(e)(e) Others, if any, specifyOthers, if any, specify**

TOTAL TOTAL PURCHASE PURCHASE TURNOVERTURNOVERTOTAL TOTAL PURCHASE PURCHASE TURNOVERTURNOVER(including stock transfer)(including stock transfer){sum of {sum of (a) to (e) (a) to (e) above}above}* * VAT paid details to be furnishedVAT paid details to be furnished* * VAT paid details to be furnishedVAT paid details to be furnished


27

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONSAnnexure Part BAnnexure Part B

14.Details Of Input Tax Credit Reversal/Adjustment14.Details Of Input Tax Credit Reversal/Adjustment..

S.NoS.No Nature of TransactionNature of Transaction Relevant Relevant

Section RuleSection Rule

Purchase Purchase

value (net of value (net of

tax)tax)

Tax paidTax paid

(in Rs)(in Rs)

Reversal/ Reversal/

AdjustmentAdjustment

Of Input Tax Of Input Tax

RemarksRemarks

**

tax)tax)

(in Rs(in Rs))


CreditCredit

(1)(1) ( 2)( 2) (3)(3) (4)(4) (5)(5) (6)(6) (7)(7)

1.1. Goods used for Civil Goods used for Civil section 2(11)section 2(11)1.1. Goods used for Civil Goods used for Civil

StructuresStructures

section 2(11)section 2(11)

2.2. Goods utilized for self useGoods utilized for self use SecSec 19(719(7)(a))(a)

3.3. Purchase of automobiles Purchase of automobiles Section Section 3.3. Purchase of automobiles Purchase of automobiles

and spare parts other than a and spare parts other than a

dealer in Automobilesdealer in Automobiles

Section Section

19(719(7)(b))(b)

4.4. Purchase of AirPurchase of Air--

conditioners other than a conditioners other than a

Section Section

19(719(7)(c))(c)conditioners other than a conditioners other than a

dealer in Airdealer in Air--conditionersconditioners

19(719(7)(c))(c)

55 Goods given as gift, free Goods given as gift, free

samplesample

Section 19(8Section 19(8))

samplesample

**If space is insufficient attach If space is insufficient attach

the details in a separate sheetthe details in a separate sheet. .


28


14.Details Of Input Tax Credit Reversal/Adjustment.14.Details Of Input Tax Credit Reversal/Adjustment.

S.NoS.No Nature of TransactionNature of Transaction Relevant Relevant Section RuleSection Rule

Purchase Purchase value (net value (net

of tax)of tax)

Tax Tax paidpaid

(in Rs)(in Rs)

Reversal/ Reversal/ AdjustmentAdjustment

Of Input Of Input

RemarksRemarks**

of tax)of tax)(in Rs(in Rs))

(in Rs)(in Rs) Of Input Of Input Tax CreditTax Credit

(1)(1) ( 2)( 2) (3)(3) (4)(4) (5)(5) (6)(6) (7)(7)66 Goods lost on theft, Goods lost on theft, sectionsection66 Goods lost on theft, Goods lost on theft,

loss etc.loss etc.sectionsection19(9)(i)19(9)(i)

77 Inputs destroyed in Inputs destroyed in fire or lostfire or lost

Section Section 19(9)(ii)19(9)(ii)

88 Inputs damaged in Inputs damaged in section section 88 Inputs damaged in Inputs damaged in transit or destroyed transit or destroyed before manufacturebefore manufacture

section section 19(9)(iii)19(9)(iii)

99 Unavailed credit on Unavailed credit on section section 99 Unavailed credit on Unavailed credit on Capital Goods(timeCapital Goods(time--barred)barred)

section section 19(3)(b)19(3)(b)

1010 Consignment sales Consignment sales with ‘F’ Formwith ‘F’ Form

section section 19(4)(i)&(ii)19(4)(i)&(ii)with ‘F’ Formwith ‘F’ Form 19(4)(i)&(ii)19(4)(i)&(ii)

**IfIf spacespace isis insufficientinsufficient

attachattach thethe detailsdetails inin aaseparateseparate sheetsheet..separateseparate sheetsheet..


29


14.Details Of Input Tax Credit Reversal/Adjustment14.Details Of Input Tax Credit Reversal/Adjustment..14.Details Of Input Tax Credit Reversal/Adjustment14.Details Of Input Tax Credit Reversal/Adjustment..



Purchase Purchase


tax)tax)

Tax paidTax paid

(in Rs)(in Rs)

Reversal/ Reversal/



RemarksRemarks

**

tax)tax)

(in Rs(in Rs))


CreditCredit

(1)(1) ( 2)( 2) (3)(3) (4)(4) (5)(5) (6)(6) (7)(7)

11.11. Stock transfer with ‘F’ Form Stock transfer with ‘F’ Form S 19(4)(i)(S 19(4)(i)(ii)ii)11.11. Stock transfer with ‘F’ Form Stock transfer with ‘F’ Form S 19(4)(i)(S 19(4)(i)(ii)ii)

1212 Purchases for production of Purchases for production of

Exempted Goods (Finished)Exempted Goods (Finished)

Section Section

19(519(5)(a))(a)

13.13. InterInter--State sale without State sale without Section Section 13.13. InterInter--State sale without State sale without

‘C’Form‘C’Form

Section Section

19(519(5)(c))(c)

1414 Purchase ReturnPurchase Return SecSec 14(i14(i))

1515 Input Tax Credit availed for Input Tax Credit availed for Section Section 1515 Input Tax Credit availed for Input Tax Credit availed for

Finished Goods Finished Goods

subsequently exemptsubsequently exempt

Section Section

19(1219(12))

**If space is insufficient attach If space is insufficient attach

the details in a separate sheet. the details in a separate sheet. the details in a separate sheet. the details in a separate sheet.


30


14.Details Of Input Tax Credit Reversal/Adjustment14.Details Of Input Tax Credit Reversal/Adjustment..



Purchase Purchase


tax)tax)

Tax paidTax paid

(in Rs)(in Rs)

Reversal/ Reversal/



RemarksRemarks**

tax)tax)

(in Rs(in Rs))


CreditCredit

(1)(1) ( 2)( 2) (3)(3) (4)(4) (5)(5) (6)(6) (7)(7)

1616 Consignment Sales Consignment Sales 1616 Consignment Sales Consignment Sales

without ‘F’ Formwithout ‘F’ Form

1717 Stock Transfer without Stock Transfer without

‘F’ Form‘F’ Form

1818 Purchase of Capital Purchase of Capital Section 19 Section 19 (6)(6)1818 Purchase of Capital Purchase of Capital

Goods used in the Goods used in the

manufacture of manufacture of

exempted goods.exempted goods.

Section 19 Section 19 (6)(6)

exempted goods.exempted goods.

1919 Others(if Others(if any, specify)any, specify)

TotalTotal

**If space is insufficient If space is insufficient **If space is insufficient If space is insufficient

attach the details in a attach the details in a

separate sheet. separate sheet.


31


15.Turnover under the Central Sales Tax, Act, 195615.Turnover under the Central Sales Tax, Act, 1956

..

CategoryCategory TurnoverTurnover(in Rs.)(in Rs.)

Rate of TaxRate of Tax Output Output TaxTax

(in Rs.)(in Rs.)(in Rs.)(in Rs.)( 1)( 1) ( 2)( 2) ( 3( 3)) ((4)4)

(a)(a) InterInter--State sales with ‘C’ FormState sales with ‘C’ Form

(b)(b) InterInter--State sales without ‘C’ FormState sales without ‘C’ Form(b)(b) InterInter--State sales without ‘C’ FormState sales without ‘C’ Form

((c)c) Consignment Sales and/or Stock Consignment Sales and/or Stock Transfer without ‘F’ formTransfer without ‘F’ form

(d)(d) PrePre--export sales without ‘H’ formexport sales without ‘H’ form(d)(d) PrePre--export sales without ‘H’ formexport sales without ‘H’ form

(e)(e) Any other taxable sales not Any other taxable sales not covered by declaration covered by declaration forms/certificates/documentsforms/certificates/documentsforms/certificates/documentsforms/certificates/documents

(A)(A) Taxable Turnover Under Central Taxable Turnover Under Central Sales Tax Sales Tax Act{Act{((a) to (e)a) to (e)}}

Add: Exempted TurnoverAdd: Exempted Turnover


32


15.Turnover under the Central Sales Tax, Act, 195615.Turnover under the Central Sales Tax, Act, 1956

..CategoryCategory TurnoverTurnover

(in Rs.)(in Rs.)Rate of TaxRate of Tax Output TaxOutput Tax

(in Rs.)(in Rs.)(in Rs.)(in Rs.) (in Rs.)(in Rs.)( 1)( 1) ( 2)( 2) ( 3( 3)) ((4)4)

(f)(f) Sales under section 5(1)Sales under section 5(1)(g)(g) Sales under section 5(2)Sales under section 5(2)(g)(g) Sales under section 5(2)Sales under section 5(2)(h)(h) Sales under section 5(3)Sales under section 5(3)

(i)(i) InterInter--State Consignment sales and State Consignment sales and Stock TransferStock TransferStock TransferStock Transfer

(j)(j) InterInter--State sales to Special Economic State sales to Special Economic ZoneZone

(k)(k) Transit SalesTransit Sales

(l)(l) Sale of Sale of Exempted GoodsExempted Goods

(m)(m) Any other sales exemptedAny other sales exempted

(B)(B) Total Exempted Turnover Under Total Exempted Turnover Under (B)(B) Total Exempted Turnover Under Total Exempted Turnover Under Central Sales Tax Act {Central Sales Tax Act {(f) to (m)(f) to (m)}}

CC Total Turnover Under Central Total Turnover Under Central Sales Tax Act {(A) + (B)}Sales Tax Act {(A) + (B)}Sales Tax Act {(A) + (B)}Sales Tax Act {(A) + (B)}


33

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONSAnnexure Part BAnnexure Part BAnnexure Part BAnnexure Part B

16(A). Details of Input Tax Credit availed on purchase of Capital Goods 16(A). Details of Input Tax Credit availed on purchase of Capital Goods

(Other than Parts and Accessories)(Other than Parts and Accessories)

..

SlSl

nono

Month &Month &

Year of Year of

Purchase Purchase

Date of Date of

commencementcommencement

of commercial of commercial

production production

Input tax Input tax

credit credit

claimed claimed

First year First year

from which from which

input tax input tax

credit can credit can

be adjusted be adjusted

Input Input tax credit adjusted tax credit adjusted

First Second Third First Second Third

Year Year year year year year

Amt % Amt % Amt Amt % % Amt %Amt %

Input tax Input tax

credit credit

lapsedlapsed

Input tax Input tax

credit credit

carried carried

forwardforward

be adjusted be adjusted

11

2222

Total Total


34


16(B). Total Input Tax Credit on Capital Goods16(B). Total Input Tax Credit on Capital Goods

..S.noS.no DescriptionDescription Eligible Eligible

Input Tax Input Tax Input Tax Input Tax Credit Credit

Input Tax Input Tax Credit Credit

Input Tax Credit Input Tax Credit eligible to be eligible to be Input Tax Input Tax

Credit Credit Brought Brought Forward Forward

Credit Credit Adjusted in Adjusted in the Current the Current YearYear

Credit Credit LapsedLapsed

eligible to be eligible to be Carried Forward Carried Forward to Next Yearto Next Year

Forward Forward from the from the Previous Previous YearYear

YearYear

(1)(1) ( 2)( 2) ( 3)( 3) ( 4)( 4) ( 5)( 5) ( ( 66))(1)(1) ( 2)( 2) ( 3)( 3) ( 4)( 4) ( 5)( 5) ( ( 66))

11 Capital GoodsCapital Goods

22 Parts and Parts and 22 Parts and Parts and AccessoriesAccessoriesTotalTotal


35


17. Details of delayed filing of Returns / Payment of Taxes17. Details of delayed filing of Returns / Payment of Taxes

..SnoSno Month to Month to

which the which the

Due date Due date

of filingof filing

Date of Date of

filingfiling

Date of Date of

payment payment

Number Number

of days of days

Tax Tax

amountamount

Interest Interest

dueduewhich the which the

return relatesreturn relates

of filingof filing filingfiling payment payment

of Taxof Tax

of days of days

delayeddelayed

amountamount duedue

(1) (2) (3) (4) (5) (6) (7) (8)


36


18. (a) In the case of a 18. (a) In the case of a trading concerntrading concern, give quantitative details of principal items of goods traded:, give quantitative details of principal items of goods traded:

i.i.opening stock;opening stock;

ii.ii.purchases during the previous year;purchases during the previous year;ii.ii.purchases during the previous year;purchases during the previous year;

iii.iii.sales during the previous year;sales during the previous year;

iv.iv.closing stock;closing stock;

v.v.shortage/excess, if anyshortage/excess, if anyv.v.shortage/excess, if anyshortage/excess, if any18 (b) In the case of a 18 (b) In the case of a manufacturing concernmanufacturing concern, give quantitative details of the principal items of raw , give quantitative details of the principal items of raw

materials, finished products and bymaterials, finished products and by--productsproducts::

(A)(A)Raw materials: Raw materials: (A)(A)Raw materials: Raw materials:

i.i.opening stock;opening stock;

ii.ii.purchases during the previous year;purchases during the previous year;ii.ii.purchases during the previous year;purchases during the previous year;

iii.iii.consumption during the previous year;consumption during the previous year;

iv.iv.sales during the previous year;sales during the previous year;

v.v.closing stock;closing stock;v.v.closing stock;closing stock;

vi.vi.*yield of finished products;*yield of finished products;

vii.vii.*percentage of yield;*percentage of yield;

viii.viii.* shortage/excess, if any,* shortage/excess, if any,viii.viii.* shortage/excess, if any,* shortage/excess, if any,


37

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS••SummarySummary ofof taxtax duedue // refundsrefunds isis toto bebe workedworked consideringconsidering returnsreturns //••SummarySummary ofof taxtax duedue // refundsrefunds isis toto bebe workedworked consideringconsidering returnsreturns //accountsaccounts asas belowbelow::

Amt as per Amt as per Correct AmtCorrect Amt DifferenceDifferenceAmt as per Amt as per Correct AmtCorrect Amt DifferenceDifference

Returns Returns as per A/cas per A/c

••Out put tax Out put tax payable under TNVAT payable under TNVAT

••Purchase tax Purchase tax payable u/s 11 / payable u/s 11 / 1212••Purchase tax Purchase tax payable u/s 11 / payable u/s 11 / 1212

••CSTCST Payable Payable

••Input Tax Input Tax Credit claimed Credit claimed ••Input Tax Input Tax Credit claimed Credit claimed

••Ineligible Ineligible ITC reversed ITC reversed

••Net Net ITC available ITC available for Adjustment for Adjustment

••RefundsRefunds claimed claimed ••RefundsRefunds claimed claimed

••ITC adjusted ITC adjusted against VAT against VAT

••ITC adjusted ITC adjusted against CSTagainst CST

••••ANYANY other items other items


38

TNVAT AUDIT PROVISIONSTNVAT AUDIT PROVISIONS••TAX liability of the dealer for the year is to be worked out as below :TAX liability of the dealer for the year is to be worked out as below :••TAX liability of the dealer for the year is to be worked out as below :TAX liability of the dealer for the year is to be worked out as below :

•• Act Act Tax Due Tax Due Tax Paid Tax Paid Balance/ ExcessBalance/ Excess

•• After adjustment After adjustment

•• (1)(1) (2)(2) (3)(3) (4)(4)•• (1)(1) (2)(2) (3)(3) (4)(4)

••TNVAT TNVAT

••CST CST

••Based on the above the dealer has to be Based on the above the dealer has to be advised toadvised to

••File revised returns for the year/month………..(rule 7(9)File revised returns for the year/month………..(rule 7(9)

••••••Pay differential Pay differential taxtax of Rs ……….. With of Rs ……….. With interestinterest of Rs………. & of Rs………. & penaltypenalty of Rs………..of Rs………..

••Reverse ITC of Rs…..in the monthly returns of ………..Reverse ITC of Rs…..in the monthly returns of ………..

••Claim refund of Rs……………Claim refund of Rs……………••Claim refund of Rs……………Claim refund of Rs……………

••With the above the form WW gets completed but prescribed annexures as listed below are With the above the form WW gets completed but prescribed annexures as listed below are to be filed and submittedto be filed and submitted

••••Annexure to form WWAnnexure to form WW, (1) , (1) Descriptive report of Non compliance Descriptive report of Non compliance , (2) , (2) short comings & short comings & deficiencies in returns fileddeficiencies in returns filed & (3) Copies of Trading, P&L A/c and Balance Sheet & (3) Copies of Trading, P&L A/c and Balance Sheet


39

THANK YOU !!THANK YOU !!THANK YOU !!THANK YOU !!

SAMPATHKUMAR.V.V.SAMPATHKUMAR.V.V.Mobile # 94440 80439Mobile # 94440 80439

Phone: + 91 44 2814 4475; 2814 0508Phone: + 91 44 2814 4475; 2814 0508Phone: + 91 44 2814 4475; 2814 0508Phone: + 91 44 2814 4475; 2814 0508Fax: 2814 1049 Fax: 2814 1049

Email: Email: [email protected]@yahoo.com

40

TNVAT Audit Questionnaire

The following sample and illustrative questions may be used while conducted the VAT

Audit. The points, remarks and observations for each of the following may be noted and

such nothings etc.,, will form part of the working papers and will be very useful to form an

opinion about the accounts and in finalizing the TNVAT Audit Report

Books and accounts 1. Whether the List of all books of accounts and registers maintained at all places relating to TN activity is provided or not? 2. If in electronic mode only whether the prints are generated periodically and kept or not? 3. What are the List of books and registers made available verification and audit?

� List out the books and registers verified Turnover details 1. Whether the turnover summary details, as per returns filed, is prepared showing data month wise, rate of tax wise? 2. Is there any difference between the figures shown in the summary of turnover prepared based on returns filed and accounts audited/ under audit? 3. If there is any difference in turnover(s), whether the reconciliation of turnover as per accounts and returns filed is prepared and shown to you? 4. Have you recorded the reasons for the variation in turnover? 5. Have verified the reconciliation of turnover statement? 6. Due to the variation in turnover whether any revised return is to be filed? If so, whether the time to file revised returns is there or not? 7. Whether any revised returns is filed during the year?

� If so, whether details / reasons for the revised return(s) filed is to be obtained and noted in your work papers with connected details/ copies of such revised returns?

8. Whether the revised return(s) is filed in time prescribed? [which is six months from the end of the relevant month of transaction] 9. Whether acknowledgement for having filed is taken from the CT office? 10. Further liability if any was paid along with interest or not? 11. Whether Interest calculation is correct or not? - Interest is 2% per month 12. Have you verified the interest workings / calculations? 13. If tax is claimed by filing revised returns, proof of having filed the revised returns is to be seen and verified? Direst Sales 1. Whether List of all goods sold is obtained or not? 2. What is the VAT rate adopted for each of the goods sold? 3. Whether the rate of VAT adopted for sale of goods is as per the rate(s) mentioned in the schedule(s)? 4. Whether the vat rates for each goods sold is noted with relevant entries in schedule to the Act or not? 5. Whether any notification for the commodity involved is issued by the Government?

� If so, the changes are effective from which date? 6. Whether such revised rates were followed immediately or later with delay? 7. If the revised rates are adopted involving delay, whether the implications arising out of this were addressed properly or not? 8. If the rates of VAT or the reduced rate as per G O is attached with any conditions, whether such conditions were complied with or not?

9. If not, the details of such reduced rate turnover is gathered and higher rate of liability is paid or not? 10. If higher rate of tax is paid, note down the details of such higher rate payments along with the returns or later?

� Note down amount paid, workings involved, due date, date of payment, interest paid 11. Whether all sale bills are verified to satisfy about the correctness of the contents in the returns as to sale value and output tax shown or test check is carried out on samples? if so the basis of selection samples is also to be noted ? 12. For sales to SEZ,EOU and covered by notifications with conditions whether the related certified true copies of documents were collected by the dealer and verified by you? 13. Whether any goods are sold against industrial input certificates at concessional rate of tax?

� If so, whether input certificate is obtained for all the sales effected? Rule 6(3)(b) 14. If collection of any industrial input certificate is pending in respect if any sales, list of such sales, customer wise for such pending certificates? 15. Whether the collected industrial input certificate is in requirement of the provisions of the Act and Rules. 16. If any wanting in any of industrial input certificate is noticed whether such nothings are recorded or not? Purchases 1. List of all goods purchased and dealt with is obtained or not? 2. What is the VAT rate adopted for each of the goods purchased? 3. Whether the rate of VAT adopted for the purchase of goods is as per the rate(s) mentioned in the schedule(s) to the Act? 4. Whether the vat rates for each goods purchased is noted in the returns backed up by relevant entries in books or not? 5. Whether any notification is issued for the commodity by the Government?

� If so, the changes are effective from which date? 6. Whether such revised rates were followed immediately or later with delay ? 7. If the revised rates are adopted delayedly, whether the implications arising out of this were addressed properly or not? 8. If the rates of VAT or the reduced rate, as per any notification, is attached with any conditions, whether such conditions were complied with or not?

� If not, the details of such turnover is gathered and higher rate of liability is paid or not? 9. If higher rate of tax is paid, note down the details of such higher payments along with the returns or payments made later? 10. Whether all purchase bills are verified to satisfy about the correctness of the contents in the returns as to sale value and output tax shown or test check is carried out on samples?

� If so the basis of selection samples is also to be noted? 11. If goods were purchased against industrial input certificate whether the certificates were issued or not? 12. Whether the dealer is entitled to issue industrial input certificate or not?

� If not eligible, whether the reasons and justifications for the such ineligibility is noted or not?

13. Whether the implications arising out of this is analysed the tax impact noted and reported? Purchases/sales, returns 1. Whether any goods purchased/sold were returned to/ by the supplier/customer? 2. Whether the goods movement documents were produced and verified?

3. Whether any statement of purchases/ sales returns was prepared and produced along with the supporting documents of debit notes/ credit notes? 4. Whether return / receipt of goods took place within the stipulated time of purchase/sale? - Time prescribed is 6 months 5. Whether the goods sent / received back is recorded in the stock book? 6. Whether the sales / purchases along with tax has been paid / claimed as ITC along with the monthly returns? 7. Whether the reference about the sale / purchase is noted in the Credit note / debit note? 8. If unfructified sales whether the goods were returned within 30 days of sales? 9. The implications arising out of the findings were analysed, discussed and noted for reporting? Input tax credit 1. Whether Input tax credit claim and adjustment account prepared by dealer? 2. Whether the same is verified 3. What is the net amount eligible for adjustment each month? 4. What is quantum of ITC that is adjusted towards VAT dues and what is the quantum for CST? ITC reversals 1) Check whether any of the following ITC reversals applicable to the dealer?

� If so, have you checked the correctness of ITC reversal workings and its reporting in returns and accounting in books account?

� Workings for reversal should have been made on the actuals. If data is not available whether the proportionate value of tax to be reversed is worked out on any acceptable basis using formula or otherwise?

� Deficiencies, shortcomings and omissions are to be noted and form part of the report � Whether the ITC reversals were calculated on a consistent basis for month on month? � If not, note down the implications involved and the variation, in quantum if workable for

reporting? 2) The input tax credit is to be reversed in respect of the following has been done or not?

� If the goods purchased are used for making civil structure - Section 2(11) � Purchase of automobiles, spare p arts and accessories other than dealer in Automobiles –

Section 19(7)(b) � Purchase of Air conditioners other than dealer in Air conditioners. Section 19(7)(c) � Goods purchased for sale issued as free of cost – samples –Section 19(8) � Unavailed credit on Capital goods (time barred) Section 19(3) (b) � Purchase Returns & Sales returns � Sale of exempted goods -IV Schedule- S 15 [S19(5) (a)] � ITC availed and not sold at time of Stoppage of business - S19(19) � Stock transfer / consignment transfer (5%) - S19(4)

� Goods are stolen, lost or destroyed, due to natural calamity, fire etc., while in storage or in transit S 19(9)

� Consignment Sales without `F' Form Section 19(4) full ITC reversal

� Stock transfer without `F' Form Section 19(4) full ITC reversal � Purchases for production of Exempted goods (Finished) Section 19(5)(a) � Inter-State sale without `C' Form section 19(5) (c) � Inter-State sale with `C' Form 3% reversal from 11/11/13 section 19(2) (v) � ITC availed for finished goods subsequently exempt. Section 19(12) � Price variations relating to sales purchase effected within the year � Input destroyed in fire or during process/mfg � Capital goods used for manufacturing of exempted goods.

� Goods purchased for business activity, but subsequently used for personal use or other activity not in the course of business - Section 19(7)(a)

� On inputs if Finished goods subsequently exempted –Section 19(12) � Bogus purchases (bill traders) � Suppliers’ registration cancelled-Section 19(15) � Transfer / sale of business not as a whole � ITC not claimed in time. (Within the Financial Year or 90 days of purchases) � Tax inv lost/misplaced and carbon copy not given in time or if AO rejects claim � ITC CG Claimed but CG sold within 3 years � Arithmetic calculations and wrong workings and claims.

� In case of stoppage or closure of business, the input credit availed to the extent that it pertains to goods remaining unsold shall be reversed on the date of stoppage / closure.

� Where the supplier’s registration is cancelled, [Section 19 (15)] the credit availed in respect of purchases from such supplier. Where a net amount payable to the Government arises as a result of the reversal, interest is also payable @ 2% per month from the date of cancellation to the date of ultimate payment.

Stock book / records / registers 1) Whether stock is maintained?

� If so, it is for all goods or only for major goods dealt with? 2) Have you verified the stock book with reference to goods movement documents? 3) Whether the goods receipt and issues are accounted then and there or is there any delay involved? 4) Whether goods movement documents are valid and proper with respect to its contents and the proscribed delivery challans is used or not? Like form JJ 5) Whether the registers prescribed for the prescribed delivery challans/ way bills etc for the movement of goods is maintained or not? Like form NN register 6) Whether register is updated then and there or delay is noticed in updating? 7) Prescribed registers like form 8, 10,12, 13 14,15 etc is maintained and updated? 8) Prescribed form H register for raw materials and finished goods is maintained by the manufacturer Works contract Regular Method 1. Whether the calculations and the basis adopted to arrive at the deemed sale value and VAT liability is explained and workings shown? 2. Whether the basis is followed month on month consistently or if there is any change in the methods of calculations of arriving at the deemed sale value and VAT liability? 3. Whether the goods used as such (of purchases) and goods used in some other form (of purchases) is identified? 4. Whether the deemed sale value of goods used as such is arrived by adding reasonable percentage of profit to the landed cost of the cost of goods till it reached the site place or till the time of accretion ? 5. Whether the deemed sale value of arrived at for the goods used in some other form, other than purchases, is arrived at by adding conversion charges, reasonable profit the landed cost of the goods till it reached the site place or till the time of accretion ? 6. Whether Goods if any provided by the Contractee and such value is part of turnover or not? 7. Whether any sub contract given by the dealer?

� If so, whether any deduction is claimed by the dealer? 8. Whether the deduction is claimed in the monthly return or not?

� If so, in which column the deduction is shown and claimed?

- No columns to show deductions 9. If deduction claimed for the payment made to the sub contractor whether the certified true copy of the VAT registration certificate and the proof for having paid the tax on the amounts paid to such sub contractor is obtained from such sub contractor?

� If not, whether the implications were analysed, discussed and noted for reporting? 10. For all the payments made to sub contractors, whether the WCT TDS provisions are complied with as to deduction of TDS in time, remittance of TDS within the prescribed time and issuance of certificate in time? 11. If form S no deduction certificate is furnished whether it is valid for this contract and for the payments made in this year? Works contract standard percentage deduction Method – Rule 8(5) 1. Whether the labour and other like charges are ascertainable from the books and records maintained by the dealer or not? 2. What is the nature of the works contract carried out? 3. What is the percentage of deduction as per rule 8(5) of TNVAT rules? 4. Whether Goods if any provided by the Contractee and such value is part of turnover or not? 5. What is the percentage adopted by the dealer in this regard? 6. Whether any sub contract given by the dealer?

� If so, whether any deduction is claimed by the dealer for sub contractors payment / labour charges portion etc?

7. Whether the deduction is claimed in the monthly return or not for sub contractors payment / labour charges portion etc?

� If so, in which column the deduction is shown and claimed? No columns to show deductions

8. If deduction claimed for the payment made to the sub contractor whether the certified true copy of the VAT registration certificate and the proof for having paid the tax on the amounts paid to such sub contractor is obtained from such sub contractor?

� If not, whether the implications were analysed, discussed and noted for reporting? 9. For all the payments made to sub contractors, whether the WCT TDS provisions are complied with as to deduction of TDS in time, remittance of TDS within the prescribed time and issuance of certificate in time? 10. If form S no deduction certificate is furnished whether it is valid for this contract and for the payments made in this year? Works contract paying tax as per the composition scheme - Section 6 1. Whether any option letter is filed to pay composition tax as per this section 6? 2. Whether the copy of the option letter is produced for verification? 3. Whether the acknowledgement for having filed the copy of option letter is produced and verified? 4. Whether the option letter is filed in time? [Along with the first monthly returns or after the commencement of contract in the nest monthly returns] 5. Any input tax credit is claimed by the dealer? - Not entitled to claim ITC 6. Any tax is collected from the contractee by this contractor? Not entitled to collect 7. Whether Goods if any provided by the Contractee and such value is part of turnover? 8. Whether any imports from foreign country effected by the dealer?

� If so, not entitled to pay tax under the composition scheme at all? 9. Whether any inter State purchases effected by the dealer?

� If so, not entitled to pay tax under the composition scheme at all? 10. Whether any deduction is claimed by this dealer? No deduction permissible 11. Whether any contract is carried out for SEZ unit in TN?

12. Whether the tax is paid for the works contract carried out for SEZ unit contract also? � If tax not paid for the contract work carried out for SEZ unit, whether the implications

arising out of this has been considered analysed, discussed and noted for reporting? Others 1. Miscellaneous income & Profit or loss of sale of used assets -- analysis 2. Profit or loss of sale of used assets - tax implications 3. Whether the information given in the monthly return is correct and complete? 4. Management representation letter is to be obtained for various matters that requires the Audit to be completed and, amongst others, it should cover the following, Whether

� Books of accounts / records and registers maintained are sufficient for verifying the correctness and completeness of the returns filed

� Returns filed includes all sales effected � Returns filed includes all purchases effected � Sales returns claimed is as per law � Adjustment of TO of sales / purchase is as per entries passed in books of A/c. � Classification of goods sold, rate of VAT, computation of output tax & net tax payable

shown in the returns are correct � Classification of goods Purchased, amount of input tax paid, deduction of input tax

claimed & reversed is correct & in conformity with law � Utilisation of statutory forms is valid purposes as per TNVAT / CST � Other info given in returns is correct and complete

Drafted and sent by SAMPATHKUMAR.V.V.

CHARTERED ACCOUNTANT C-3, GF, # 49, MAMBALAM HIGH ROAD, T.NAGAR, CHENNAI - 600 017.

Phone: +91 44 2814 4475; 2814 0508; Fax: 2814 1049 Email: [email protected]

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