CA Umesh Sharma

CA Umesh SharmaArjuna (Fictional Character): Krishna, it is necessary to recall the new changes that have taken place in the MVAT laws from 1st April 2015.

Krishna (Fictional Character): Arjuna, ss per the various conditions and financial situations in the state, the Maharashtra Government makes changes in VAT Law time to time. Changes are implemented through Notification, Circulars, etc after the Finance bill is passed and accordingly taxpayer has to follow laws.

Arjuna: Krishna, What are the major changes in the MVAT which are applicable from 1st April 2015?

Krishna: Arjuna, Maharashtra Government has presented the State Budget on 18th March, and it got assent on 26th March. Following are the major changes in that which are as follows:

  1. Profession Tax is not levied on salary of Women upto Rs.10,000 p.m.
  2. Entry Tax is required to be paid @ 5% if Steel Bar and Steel Structure is purchased from other state.
  3. If Service Tax is included in the turnover of Sales and purchases, then for the purpose of turnover of MVAT, service tax will not be included in it; i.e. VAT is not levied on Service Tax.
  4. The Dealer may file Revised Returns u/s 20 (4) (C) for number of times, if he has received Notice from the sales tax department or his case is selected for Assessment.
  5. If Taxpayer has filed Return within 1 month after due date then late fees of Rs. 1,000/- instead of Rs. 2,000 is required to be paid. This provision is applicable from 1st May, 2015.
  6. The Government has brought same provision of Assessment in VAT, like in Income Tax. Department can issue notice of Assessment if he has “Reason to Believe” that the Dealer has evaded Tax or he has paid less Tax. According to this provision, the department can go back upto 6 years. The dealer has also been provided with an option of reopening under this section.
  7. If Taxpayer has filed annual revised return u/s 20(4)(B) or 20(4)(C) then he has to pay Interest on the tax liability from 1st October of that year till the date of payment of taxes.
  8. No major amendments have been made in the rates of VAT. VAT Rate of LED Lights, Purses and Handbags of Women has been reduced from 12.5% to 5%. Further, medicines required for the Cancer Treatment has been made Tax free.
  9. The government has also reduced ambiguity in tax rates of certain items. Work book, Practical Book, Graph Book have been made Tax free. 5% VAT is levied on White Butter. If Variety of Spices are mixed together and sold then they are charged to VAT @5%.

KarneetiArjuna: Krishna, What care should be taken by dealers while filling Return for the period ended March 2015?

Krishna: Arjuna, dealers have to consider the changes that have been made in the previous year by Department while filling the March end return.

  1. Annexure J1 and J2: Earlier dealers to whom VAT Audit was not applicable had to file Annual J1 and J2 along with the March end Return; but from 1st April 2014 Annexure J1 and J2 are required to be filed along with Return. Accordingly dealer has to file Annexure J1 and J2 of the return period with March end Return and will also require filing Annual Annexure J1 and J2. Further dealer should verify the Miss Match report from Dealer Information System and should file rectified J1 and J2 and return.
  2. VAT Composition Scheme: Government has made changes in the taxation criteria of this scheme from 1st October 2014. Dealers, if registered under the scheme should pay tax according to new provision i.e. 1% or 1.5% of total turnover and should file March end return accordingly.

Arjuna: Krishna, What should the dealers do regarding the decision of High Court on VAT refund on the basis of return?

Krishna: Arjuna, if taxpayer has filed return for the previous years but has not filed form 501 of refund then dealer can claim VAT refund on the basis of return filed. In these cases High court has ordered Department to give VAT refund within 8 weeks.

Arjuna: Krishna, What is the Internal Circular for Builders of 24th March 2015?

Krishna: Arjuna, sales tax department has given following two directions to the sales tax officer for dealers to whom Administrative relief is not given:

  1. While giving Administrative relief, officer should not verify tax calculation method for the Builder taxpayers who have taken Registration before 15th October and have paid tax and filed return before 31st Further if Assessment order is issued then it should be verified.
  2. Assessing officer should not go in previous year for Audit or for Assessment if dealer has carried forward the VAT refund. Many notifications of Administrative relief have been given by the department.

Arjuna: Krishna, how should Taxpayer find benefit from the VAT law?

Krishna: Arjuna, Department has given relief to taxpayers by making amendments in VAT like filling of Revise returns. Also department has made some complications in Assessment provisions. But the High Court has removed the obstacle in the path of VAT refund so that Taxpayer can easily obtain VAT Refund. Taxpayer should clarify the differences in the Miss Match report by making adjustments with their parties and should file correct return for March 2015. The dealer’s destination may be tracked by the site if VAT laws are not followed. Therefore it is rightly said don’t play with the Law!

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0 responses to “What’s new in MVAT”

  1. nidhi says:

    I have one doubt in vat assessment.

    Thanks in advance.

    My dad received notice regarding order of assment under form 303 from vat department 3 years ago for AY 12-13 amounting to around 1 lac. That tym we have already applied for cancellation of vat number and already paid all the taxes before pls held me out…what need to do..

  2. Roshan says:

    I have manufacture of LED PRODUCTS Like LED bulb, LED downlight, LED sterrt Light and other LED product.
    Government has reduced VAT form 12.5% to 5%.
    But can you tell me i will take 5% on all products or only on LED Bulb.

  3. CA Umesh Sharma says:

    Dear Santoshji,
    For 2013-14
    The department will issue notice requiring documentation on the basis of Form 501, after that you will have to submit the documents to the department. After scrutiny / assessment or mis match verification refund will be issued.

    For 14-15 –
    The due date for filing return for the period ended March 2015 is 30th April. After 30th April check mis match report from the departments website. If there are mis matches get them rectified and then go for refund.

  4. Shrinivas Patil says:

    Thank you Umesh Sir,
    This article is realy nice, Thanks for providing more clarification on VAT refunds.

    Shrinivas Patil

  5. Rakesh says:

    Gr8 Job

  6. Mital Monani says:

    Nice Article

  7. Santosh Pandit says:


    I have filled our Refund Application E 501 for the Financial Year 2013-14.
    Can I get this refund immediate. And what about Financial Year 2014-15.
    If i furnish refund application 14-15 can we get refund immediate.Please advise.

  8. JAYENDRA says:

    Thank you Sharmaji,

    You have very nicely explained the changes in MVAT provisions in short article. Your style of question-answer form too is very easy for a layman like us to understand.



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