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CA Umesh Sharma

Arjuna (Fictional Character): Krishna, the festival of Makar Sankranti has arrived. Small children are in rush and excited to fly kites. Even government is trying to fly the kite of GST. But before that the Maharashtra Sales tax department has brought circular for flying kite of old not submitted VAT returns. What ease (Dhil) is given in filing these old returns?

Krishna (Fictional Character): Arjuna, on Makar Sankranti it is said that “Til Gul ghya god god bola” like that Sales tax department is saying ” til gul ghya aani file VAT returns.” If we compare VAT and kite flying then the person who is flying kite is Trader, “kite” is VAT Return, “Chakri” means books of accounts, “Air” means Annual Turnover, The person taking “Page” is VAT officer, “String” means Law, VAT Auditor is the person who solves the jumbled thread. From Makar Sankranti , the Sun shifts towards North. That is called as “Uttarayan”. That means after this festival there will be change in the weather, the cold wind tends to reduce and warm wind will blow. This year it is happening in Indirect Taxes. The wind of Excise, Custom duty, Service tax, VAT will go and bring the wind of GST. On this festival, ladies give gifts (Vaan) to each other. Like that the Sales tax department is giving gift by not taking late fees on delayed filed VAT returns. Currently in the month of January there is a lot of kite flying in VAT. There are many activities to be carried out by dealer like GST provisional registration, VAT audit, CDA notices, and now filling of old VAT returns. As while flying of kite there is jumbling in threads now the same situation is of the tax payers.

Relief from Penalty of filing Late mvat Return

Arjuna (Fictional Character): Krishna, what were the provisions relating to filing  of VAT returns and what are the provisions for late filling of VAT return?

Krishna (Fictional Character): Arjuna, According to the provisions the periodicity of filling of VAT returns of any dealer depends on the turnover and amount of VAT paid. The different periodicities of filing of VAT return was monthly, Quarterly and Half yearly till 31st March 2016. But after 1st April 2016 there will be only two types of periodicities i.e. monthly and quarterly. Every dealers periodicity of filing VAT return will be shown on Department of Sales tax website. The dealer is required to file VAT return within 21 days after the end of Month or Quarter. According to the Section 20(6) of sales tax if the return is filed after due date within one month then late fees of Rs. 1000/- was compulsorily required to be paid and if vat return is filled after 1month of the due date than late fees of Rs. 5000/- was compulsorily required to be paid.

Arjuna (Fictional Character):  Krishna, what government has brought in the new circular on 2nd Jan 2017?

Krishna (Fictional Character): Arjuna, After implementation of GST law VAT law will come to an end. Now GST registrations are going on. It came to notice of the Sales tax department that many dealers have not filed old VAT returns of previous years. That’s why on this festival Sales tax Department is giving a gift to the persons who have not filed their VAT return earlier. The VAT law came into existence in the year 2005. The persons who did not filed their VAT returns since 2005 till 31st March 2016 i.e. for any financial year then they can file their return from 1st Jan 2017 till 31st Jan 2017 and no late fees will be charged on that. And if the person files his return during 1st Feb 2017 to 28th Feb 2017 then late fees of Rs 2,000/- will be charged on each return filed. And if return is filed even after 28th Feb then late fees will be charged of Rs. 5,000/- on each return filed. That means all dealers should file their old returns as late fees is not charged or else the kite of old returns will give problem while flying.

Arjuna (Fictional Character): Krishna, what will happen to the persons who have filed their returns according to the rules or have filed returns after due date by paying late fees?

Krishna (Fictional Character): Arjuna, As while flying kites the person who is behind all is the one who cuts maximum kites like that the one who did not filed their earlier returns got the benefit of filing their VAT returns without paying late fees. Before this many dealers have paid late fees for delayed filing in return. That means the person who follows the law had to suffer and who didn’t follow got the benefit.

Arjuna (Fictional Character): Krishna, what one should learn from this?

Krishna (Fictional Character):  Arjuna, nowadays it is not possible for everyone to fly Kite. Many cut the kite of others from “Sadi”. In Business Practices everyone should check the Tax compliance of opposite party. Otherwise problem may have to be faced and Sales Tax Department will help or not is unpredictable. Like in Kite Flying the expert only stay on the field till the end similarly in business the one who follows law will stay. Sales Tax Department should protect the Taxpayer following Law and should punish the Law evader. The dealers should take the benefit of this circular and file the old non filed returns. Before implementation of GST, jumbled string of VAT is required to be solved. Now for flying kite of GST the required air is blocked due to various issues. hence we expect the kite of GST will fly soon.


Author Bio

1. Central Council Member of ICAI. 2. Vice-Chairman of WIRC of ICAI for the period 2015-2021. 3. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 4. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNEETI” published in Lokmat on every View Full Profile

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July 2024