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A

REPORT

ON

IMPACT OF VALUE ADDED TAX ON GNFC

AT

GUJARAT NARMADA VALLEY FERTILIZERCOMPANY LIMITED

Submitted By:

TUSHAR DABGAR H.

06 MBA 06

GUIDED BY:

MR. PRASHANT JOSHI

MBA PROGRAMME

(2006-08)

SHRIMAD RAJCHANDRA INSTITUTE OF

MANAGEMENT AND COMPUTER APPLICATIONSMBA PROGRAMME (2006-08)

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ACKNOWLEDGEMENT

Theoretical knowledge is imparted in the classroom setting, while the

practical knowledge is to be gained through industrial training, which

is much more required.

Firstly, I would like to acknowledge Mr. V.A, Pujara (AGM Training

center), Mr. B.R. Patel (Sr. Manager Training center) and Mr. K.J.

Bhatt (Sr. Manager) for granting the permission of training.

I would like to thankful to Mr. A.K. Trivedi (AGM Budgeting &

Costing Finance) for their support and guidance.

I am grateful to Mr. D.R. Panchal for arranging the necessary

meetings in the finance department and invaluable support and

guidance.

I am thankful to Mr. R.M. Patel (Sr. Manager VAT & Service tax)

without help of him the project would be incomplete.

Lastly, my gratitude express towards Mr. Prashant Joshi, thecollege guide for his co-operation and encouragement.

TUSHAR DABGAR

06 MBA 06

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PREFACE

IGNORANCE OF LAW IS NOT AN EXCUSE

Value added tax is being applicable in the 21 states of India from 1st

April 2005 in the 21 states of India. But in the important historical

states like Gujarat, Maharashtra, Tamil nadu, Zarkhand,

Chhatisghadh, Uttarpradsh etc., VAT is not in existence due to

various reasons. Now, VAT is introduced in Gujarat and Maharashtra

from 1st April 2006.

The report presents VAT concept, procedures, VAT rates; itemscovered and overall impact on India.

Tax consumes a major portion of a firms income and is a source of

revenue for the government. The report contains the impact of VAT

as compared to GST on GNFC, a manufacturing organization.

TUSHAR H.DABGAR

(SRIMCA)

06 MBA 06

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EXECUTIVE SUMMARY

This report is for analysis of IMPACT OF VAT AT GNFC This report

provides some conclusion and recommendations about the

management of taxation for GNFC.

Gujarat Narmada Fertilizer Company is apex Company in the SAARC

country that is manufacturing the AMMONIA, UREA, METHANOL and

CONCENTRATED NITRIC ACID as a main product & also other productsas a by products. GNFC is the only company permitted by the govt. of

India to produce the TDI in India.

The company is looking forward in increasing business in Asia and also

they try to maximize their profit with the minimum investment in

current assets.

The main research problem is to find out how efficiently GNFC ismanaging the TAXATION for their regular activity.

This research is based on the secondary data.

The objectives of this study are

To get conceptual clarity of VAT.

To understand and analyze the tax rates applicability in

GST(Goods Service Tax) and VAT (Value Added Tax ) and

compare the tax liability under both this Acts at G.N.F.C.

To know the Govt. Revenue After implementing the VAT.

Effect of Implication of VAT at G.N.F.C. Company.

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The study is based on descriptive type research in which has collected

data from the Company Annual report and also collect the data form

various departments like Purchase, Stores etc.

Looking toward the current scenario of the manufacturing company,

earn a lot to maximize the profit and to manage the cash during the

entire financial year.

The major findings from this study are that the GNFC is pay less tax as

compare to the previous year because of the implementation of VAT so

getting the benefit of ITC (input tax credit).

GNFC has continue with that strategy because Rate of Industrial

Products has also not affected as the rate is same i.e. 4% as it was at

the time of Sales Tax. On the other hand, it helps reducing prices as

now company can get ITC.

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TABLE OF CONTENTS

SR.

NO.

TOPIC PAGE

NO.

01 INTRODUCTION OF VAT

COMPANY PROFILE

FINANCE DEPARTMENT

02 RESEARCH METHODOLOGY

03 THEORITICAL PERSPECTIVE

04 CONCLUSIONS

05 RECOMMENDATIONS

BIBLIOGRAPHYAPPENDIX