CA Umesh Sharma
Krishna (Fictional Character): Arjuna, Generally department issues notices of Mismatch for differences between sales and purchases after VAT Audit. Now from April 2014 onwards, filing of Annexure J1 and J2 along with return has been started. Therefore Mismatch Report is available online to the Dealers after filing return. The Dealers can check Mismatch Report and other information from “Dealer Information System”.
Arjuna: Krishna, how to log into the “Dealer Information System”?
Krishna: Arjuna, Dealer can get this information after logging onto the Maharashtra Government’s “Mahavat.gov.in” Site and going into the tab of Dealer information System.
Arjuna: Krishna, what information will the dealer get through this “DIS”?
Krishna: Arjuna, a dealer can get following information from the “Dealer Information System”:
1) Return: Taxpayer will get the information regarding the returns filed by him.
2) Tax Payment: Taxpayer will get information of MVAT and CST payments made along with the challan number.
3) Commodity: It shows the list of those commodities in which the dealer deals and those which are mentioned in the Registration certificate.
4) Partner, Director: It gives the information of the partners if it is a Partnership Firm and Directors if there is Company.
5) Bank Information: It gives the information of the Bank Accounts used for Business and information which is given to the Department.
6) Mismatch Report: Taxpayer will get the TIN wise mismatch of Sales and Purchases.
Arjuna: Krishna, what is the most important aspect in this DIS?
Krishna: Arjuna, in this “DIS” system the most important is ITC or setoff Mismatch Report. Taxpayer gives information relating to sales in Annexure J1 and of purchases in Annexure J2 along with return. The annexures have Sale of one taxpayer and purchase of other. If differences arise in the same then it is called as Mismatch Report. If Taxpayer has made purchases and has availed setoff mentioning that in the return and in annexure J2, but the seller has not mentioned the TIN of taxpayer in annexure J1 or shown at lesser value then it is called as Mismatch Report. For e.g. Mr. “A” has made purchases from Mr. “B” amounting Rs. 50,000/- which consists VAT of Rs. 2,500/-. “A” has availed setoff of Rs. 2,500/- on the purchase made and mentioned the TIN of “B” in annexure J2. But “B” has not mentioned the TIN of “A” in Annexure J1 or showed at Net Rs. 30,000/- and VAT Rs. 1,500/- then it will be shown in the Mismatch Report. This is very similar to a Cheque. Money is deposited in the account of the one whose name is mentioned on the cheque. If there is a mistake in the name then the cheque cannot be passed. Likewise if there is a mistake in TIN or a difference in the sale or purchase value then it will be shown as a Mismatch. The Annexure J1 and J2 filed by the taxpayer cannot be revised i.e. the information of sale or purchase given according to TIN cannot be changed. However, at the end of the year changes can be made by filling Supplementary Annexure. But till that time it is very late.
Arjuna: Krishna, how should the taxpayer use this Information?
Krishna: Arjuna, the taxpayer should take out the Mismatch Report himself and make reconciliation for the differences in books of accounts and suppliers books of accounts. Taxpayer should check the information of the return filed and the payment of taxes made. Taxpayer should check the information related to the commodities in which the taxpayer is dealing, information of Bank Account, and information of partner and director is correct or not. Taxpayer should rectify the mistakes, if any, so that they don’t have to face the problems of Notices. Vat auditor may be required to reconcile the differences and report accordingly in his VAT audit report.
Arjuna: Krishna, what should the taxpayer learn from this “Dealer Information System”?
Krishna: Arjuna, Government themselves are building a system so as to lead dealers into following business related laws on their own. As in Income Tax, TDS credit is verified from the Form 26. Similarly, in VAT it is checked from the “Dealer Information System”. If any discrepancy occurs then Government will issue Notice to Taxpayer. Earlier it was done annually but now this is made according to the periodicity of returns. Therefore the dealer has to make transactions by checking “Dealer Information System”. Due to this Hawala, Bougus, Taxevader can be easily trapped. This is a good step taken by the Department to disclose dealers’ information, so that self-compliance of law will increase and issues can be resolved in time. But technical issues of Data management needs to be tackle by sales tax department, otherwise it’s going to be a big mess. Thus dealers can put check on the suppliers or customers who do not comply with law and defraud revenue.
Dear Tax guru lovers, your comment please, as they are very valuable and precious.