829, 8th Floor, Vikrikar Bhavan, Mazgaon, Mumbai

INTERNAL CIRCULAR

No. SCS/J.C. (E.I.U.)/E-704 Unit/Mumbai – Dated – 19.08.2013

Internal Circular No. 9A Of 2013

Sub: – Procedure for cross-checks of transactions of the sellers who have filed incomplete Annexure J1 for the F.Y. 2009-10 and 2010-11

During the audits conducted for the F.Y. 2008-09 various functional officers have given the feedback that in most of the cases, the buyers or sellers were able to reconcile sales and purchases when auditing officers had verified parameters in relation to cross-matching of annexure J2 with annexure J1. It has been the experience of the departmental officers that mismatches and un-matches of annual figures of sales and purchases in Annexures j2 and J1 are because of following reasons –

1. The year-end transactions of seller are accounted for by buyers in subsequent years.

2. The big LTU dealers are not able to consolidate their Depot-wise sales while filing their Annexure J1.

3. In some cases the sellers have not captured TINs of buyers being it was not the statutory requirement for them and they could not upload their correct j1 with buyers’ TINs.

4. Sometime goods returned are shown in Annexure J1 by the buyers without reducing ITC claim in annexure J2 whereas sellers reduce sales in their Annexure Jl.

Therefore while selecting cases for the periods 2009-10 and 2010-11, the above parameters have been refined and only such mismatches and un-matches have been considered wherein the suppliers have filed full Annesure J1. The full Annexure J1 means the cases where tax collection in Annexure J1 is equal to or more than tax collection shown in the Part I of Form e-704. However it is necessary to verify the correctness of ITC claimed by the annexure J2 filers who have shown their purchases from incomplete filers of annexure J1.

The cross verification as stated shall be conducted on sellers who are incomplete annexure filers and selected by EIU. The sellers include dealers from LTUs and non-LTU categories. The procedure for cross checks shall be as under.

Procedure for Cross checks –

1. EIU shall select incomplete annexure J1 filers, which are generating huge mismatches and un¬matches, commensurate with the man-power available in Cross Check branches across Maharashtra. These cases shall be distributed to these branches for financial years 2009-10 and 2010-11. EIU shall also select and distribute such sellers of LTU category to LTU officers.

2. The Cross-Check Branches / LTUs shall be given these. Sellers’ cases along with list of annual claims of ITC by their buyers in Annexure J2 for financial years 2009-10 and 2010-11.

3. The Cross-Check Branch / LTU shall compare such ITC claims of buyers with actual sales shown in the Sales Registers of Sellers. Moreover, they shall also verify their returns to confirm that the sales as per the Sales Registers match with those shown in returns and made the tax payments accordingly.

4. If any claim of ITC in Annexure J2 of the buyer is not found in Sales Registers, and if the seller accepts sales suppression then such seller shall have to pay the tax on such sales suppression by filing revised return.

5. In case of denial of sales by the seller where ITC is claimed by buyer, the cross check / LTU officer shall send such information in the Annexure A (format as under) to EIU for initiating IBA of buyers for disallowance of ITC.

6. In respect of the F.Y. 2009-10, such an information shall be sent to EIU latest by 30.11.2013 so that the IBA Officers shall get enough time to initiate IBA of such buyers. The information in respect of F.Y. 2010-11 is required to be submitted before 31-01-2014.

Annexure A

(Sales denied by the Sellers during cross check)

Sr. no.

F.Y.

TIN of
seller

TIN of
Buyer

Net Sales

Tax

Gross Sales

7. In respect of tax liability accepted by the sellers on account of sales suppression by filing revised returns as enumerated at Sr. No. 4 of this para, the Cross check / LTU Officer shall submit the information to EIU in Annexure B (format as under):-

Annexure B

(Sales suppression accepted by the Sellers during cross check)

Sr.

no.

F.Y.

TIN of

seller

TIN of

Buyer

Net

Sales

Tax

Gross

Sales

Amount of tax

paid

Date of filing

return/payment

The instructions given shall be followed scrupulously.

(Dr. Nitin Kareer)

Commissioner of Sales Tax,

Maharashtra State, Mumbai.

829, 8th Floor, Vikrikar Bhavan,

M azgaon, M urnb al

INTERNAL CIRCULAR

(Restricted Circular for Office use only)

No. SCS/J.C. (E.I.U.)/E-704 Unit/Mumbai Dated – 19.08.2013


Internal Circular No. 9A Of2013

Sub: – Procedure for cross-checks of transactions of the sellers who have filed incompleteAnnexure J1 for the F.Y. 2009-10 and 2010-11

During the audits conducted for the F.Y. 2008-09 various functional officers have given the feedback that in most of the cases, the buyers or sellers were able to reconcile sales and purchases when auditing officers had verified parameters in relation to cross-matching of annexure J2 with annexure J1. It has been the experience of the departmental officers that mismatches and un-matches of annual figures of sales and purchases in Annexures j2 and J1 are because of following reasons –

1. The year-end transactions of seller are accounted for by buyers in subsequent years.

2. The big LTU dealers are not able to consolidate their Depot-wise sales while filing their Annexure J1.

3. In some cases the sellers have not captured TINs of buyers being it was not the statutory requirement for them and they could not upload their correct j1 with buyers’ TINs.

4. Sometime goods returned are shown in Annexure J1 by the buyers without reducing ITC claim in annexure J2 whereas sellers reduce sales in their Annexure Jl.

Therefore while selecting cases for the periods 2009-10 and 2010-11, the above parameters have been refined and only such mismatches and un-matches have been considered wherein the suppliers have filed full Annesure J1. The full Annexure J1 means the cases where tax collection in Annexure J1 is equal to or more than tax collection shown in the Part I of Form e-704. However it is necessary to verify the correctness of ITC claimed by the annexure J2 filers who have shown their purchases from incomplete filers of annexure J1.

The cross verification as stated shall be conducted on sellers who are incomplete annexure filers and selected by EIU. The sellers include dealers from LTUs and non-LTU categories. The procedure for cross checks shall be as under.

Procedure for Cross checks –

1. EIU shall select incomplete annexure J1 filers, which are generating huge mismatches and un­matches, commensurate with the man-power available in Cross Check branches across Maharashtra. These cases shall be distributed to these branches for financial years 2009-10 and 2010-11. EIU shall also select and distribute such sellers of LTU category to LTU officers.

2. The Cross-Check Branches / LTUs shall be given these. Sellers’ cases along with list of annual claims of ITC by their buyers in Annexure J2 for financial years 2009-10 and 2010-11.


3. The Cross-Check Branch / LTU shall compare such ITC claims of buyers with actual sales shown in the Sales Registers of Sellers. Moreover, they shall also verify their returns to confirm that the sales as per the Sales Registers match with those shown in returns and made the tax payments accordingly.

4. If any claim of ITC in Annexure J2 of the buyer is not found in Sales Registers, and if the seller accepts sales suppression then such seller shall have to pay the tax on such sales suppression by filing revised return.

5. In case of denial of sales by the seller where ITC is claimed by buyer, the cross check / LTU officer shall send such information in the Annexure A (format as under) to EIU for initiating IBA of buyers for disallowance of ITC.

6. In respect of the F.Y. 2009-10, such an information shall be sent to EIU latest by 30.11.2013 so that the IBA Officers shall get enough time to initiate IBA of such buyers. The information in respect of F.Y. 2010-11 is required to be submitted before 31-01-2014.

Annexure A
(Sales denied by the Sellers during cross check)

Sr. no.

F.Y.

TIN of
seller

TIN of
Buyer

Net Sales

Tax

Gross Sales

7. In respect of tax liability accepted by the sellers on account of sales suppression by filing revised returns as enumerated at Sr. No. 4 of this para, the Cross check / LTU Officer shall submit the information to EIU in Annexure B (format as under):-

Annexure B

(Sales suppression accepted by the Sellers during cross check)

Sr.

F.Y.

TIN of

TIN of

Net

Tax

Gross

Amount of tax

Date of filing

no.

seller

Buyer

Sales

Sales

paid

return/payment


The instructions given shall be followed scrupulously.




Joint Commissioner of Sales Tax, DU, Maharashtra State, Mumbai.

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