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PAYMENT OF VAT UNDER TAMIL NADU VALUE ADDED TAX ACT

PAYMENT OF VAT UNDER TAMIL NADU VALUE ADDED TAX ACT

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Published by: karuna_jenu on Jun 16, 2011
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08/07/2013

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PAYMENT OF VAT UNDER TAMIL NADU VALUE ADDED TAX ACT, 2006By: Mr. M. GOVINDARAJAN : View Profile Rate of Tax:The tax rate is not uniform. Various rates are applicable to various goods. The following are the rate of tax under the Tamil Nadu Value Added Tax Act, 2006 ('Act' for short) for the goods specified in the respective schedules:Ø Goods which are taxable at the rate of 1% - First Schedule - Part A - Jewellery goods;Ø Goods which are taxable at the rate of 4% - First Schedule - Part B - 150 goods are placed in this part;Ø Goods which are taxable at the rate of 12.5% - First Schedule - Part C - All goods other than those exempted in the fourth schedule and those specified inSecond Schedule and in Part A and Part B of the First Schedule;Ø Various rates of tax - Second Schedule - levied at the point first sale inthe State or at the second point of sale in the State;Ø Compounded rate for hotels, restaurants and Sweet Halls - Third Schedule;Ø Goods exempted from tax - Fourth Schedule - Part A and Part B;Ø Zero rate sale - Fifth Schedule for the international organizations.Zero rating:In addition to the sale of goods to International Organizations listed in the Fifth Schedule the following shall be zero rate sale and shall be eligible for input tax credit or refund of the amount of the tax paid onthe purchase of goods specified in the First Schedule including capital goods,by a registered dealer in Tamil Nadu subject to such restrictions and conditionsas may be prescribed.Ø A sale specified under Sec. 5(3)(1) of the Central Sales Tax Act, 1956; andØ Sale of goods to any registered dealer located in Special Economic Zone inTamil Nadu, if such registered dealer has been authorized to establish such units by the authority specified by the Central Government in this behalf.The dealer, who makes zero rate sale, shall be entitled to refund of input tax paid or payable by him on purchase of those goods, which are exported as such orconsumed or used in the manufacture of other goods that are exported subject tosuch restrictions and conditions as may be prescribed.Where the dealer has not adjusted the input tax credit or has not made a claim for refund within a period of 180 days from the date of such accrual of such input tax credit such credit shall lapse to the Government.Issue of Invoice:Every registered dealer shall issue bill or invoice foreach sale in triplicate showing the particulars of goods and quantity sold withits value, one copy of which must be retained for check by the officials of thecommercial tax department. The invoice shall contain the rate and tax charged,the TIN of the seller and that of the buyer, in the case of the buyer is a registered dealer.Rounding of Tax:The amount of tax shall be rounded off to the nearest rupee and, for this purpose where such amount contains a part of a rupee consisting of paise, then if such part is 50 paise or more, it shall be increased to onerupee and if such part is less fifty paise, it shall be ignored.Mode of Payment:The tax due under this Act shall be paid-Ø By remittance into State Bank of India or any other bank authorized by theGovernment from time to time; orØ By remittance in cash into a Government Treasury or to the assessing authority or other officer empowered to make the demand or authorized to make the collection; orØ By means of a crossed cheque drawn in favor of the assessing authority on any one of the banks situated within the city/town where office of the assessing
 
authority is situated; orØ By any other mode as authorized by the Government from time to time.The method of payment by means of cheque shall not be applicable to the casual traders and to the dealers whose cheque got dishonored for want of funds on morethan one occasion.Turnover:Turnover means the aggregate amount for which goods arebrought or sold, or delivered or supplied or other disposed of in any of the sales, by a dealer either directly or through another, on his own account or on account of others, whether for cash or for deferred payment or other valuable consideration. The proceeds of the sale by a person other than tea and rubber grownwithin Tamil Nadu by himself or any land in which he has an interest whether asowner, usufructuary mortgagee, tenant or otherwise shall be excluded from the turnover.Any amount charged by a dealer by way of tax, separatelywithout including the same in the price of the goods sold, shall be included inthe turnover.Any amount realized by a dealer by way of sale of his business as a whole shall not be included in the turnover.Total Turnover:The total turnover means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not, the whole or any portion of such turnover is liable to tax.Taxable Turnover:Taxable turnover means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed.The taxable turnover of the dealer to pay tax on transfer of property in goods involved in the execution of works contract shall be arrived at after deducting the following amounts from the total turnover of the dealer, namely:-Ø All amounts involved in respect of goods involved in the execution of workscontract in the course of export of the goods out of the territory of India orin the course of import of the goods into the territory of India or in the course of inter state trade or commerce;Ø All amounts relating to the sale of any goods involved in the execution ofworks contract which are specifically exempted from tax under the Act;Ø All amounts paid to the sub-contractors as consideration for execution of works contract whether wholly or partly; No such deduction shall be allowed unless the dealer claiming deduction, produces proof that the sub contractor is a registered dealer liable to pay tax under this Act and that the turnover of such amount is included in the return filed by such sub-contractor;Ø All amounts towards labor charges and other charges not involving any transfer of property in goods, actually incurred in connection with the execution ofworks contract, or such amounts collected at the rate specified in column 3 of the table below, if they are not ascertainable from the books of accounts maintained and produced by a dealer before the assessing authority.Sl.No.Types of works contractLabor or other charges as a % value of the workscontract1Electrical Contracts152All Structural Contracts153Sanitary Contracts254Watch and/or clock repair contracts505Dyeing Contracts506All Other Contracts30Ø All amounts, including the tax collected from the customer, refunded to thecustomer or adjusted towards any amount payable by the customer, in respect ofunexecuted portion of works contract based on the correctness on account of measurements or check measurements, subject to the conditions that-§ the turnover was included in the return and tax paid; and
 
§ the amount including the tax collected from the customer is refunded oradjusted within a period of six months from the due date of filing of the returnin which the said amount was included and tax was paid.Levy of Taxes:The following dealers shall pay tax under this Act:Ø A Casual dealer irrespective of his turnover for a yea;Ø Agent of a non resident dealer irrespective of his turnover for a year;Ø Every dealer other than a casual dealer or agent of a non resident dealer,whose total turnover for a year is not less than Rs. 5 lakhs;Ø Every dealer other than a casual dealer or agent of a non resident dealer whose total turnover in respect of purchase and sale within Tamil Nadu is not less than Rs. 50 lakhs;In the case of the goods specified in Part B or Part C of the First Schedule, the tax under this Act shall be payable by a dealer on every sale made by him within Tamil Nadu at the rate specified therein. The tax payable by a registered dealer shall be reduced in the manner prescribed, to the extent of tax paid on his purchase of goods specified in Part B or Part C of the First Schedule, insidethe State, to the registered dealer who sold the goods to him.Every dealer, who deals in the goods specified in the Second Schedule, shall pay a tax, for each year on the sale or purchase of such goods at the point and at the rate specified therein. The dealer shall not be entitled to input tax credit on tax purchased by him.Levy of Taxes on second and subsequent sales:Every dealer who effects second and subsequent sales ofgoods purchased within Tamil Nadu, whose total turnover for a year is less thanRs. 50 lakhs, may, at his option, instead of paying tax on every sale, pay a taxfor each year, on his total turnover at such rate not exceeding 1% as may be notified by the Government. Such option shall be exercised by the dealer within30 days from the date of commencement of the Act. Such dealer shall not collect tax exceeding the rate notified by the Government. Such dealer shall not be entitled to input tax credit on goods purchased by him. The dealer who purchased goods from such dealer shall also not be entitled to input tax credit on the goods purchased by him.Tax on goods with containers or packaging materials:When goods are sold together with containers or packingmaterials, the rate of tax applicable to such containers or packing materials, as the case may be, shall, whether the price of the containers or packing materials is charged separately or not, be the same as those applicable to the goods contained or packed and the turnover in respect of containers and packing materials shall be included in the turnover of such goods.Where the sale of goods, packed in any container or packed in any packing materials, in which such goods are packed, is exempt from tax,then the sale of such containers or packing materials shall also be exempt fromtax.Levy of Tax on right to use any goods:Every dealer shall pay for each year a tax on his taxable turnover relating to the business of right to use any goods, for any purpose,which shall be arrived at after deducting the amounts involved in the business of transfer of the right to use any goods for any purpose, in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India, at such rates specified in the First Schedule.The dealer shall be entitled to input tax credit on thegoods specified in the First Schedule, purchased by him to the extent of the output tax paid or payable as may be prescribed.Levy of tax on Works Contract:Every dealer shall pay for each year a tax on his taxable turnover relating to his business of transfer of property in goods involved inthe execution of works contract, either in the same form or some other form, which may be arrived at in such manner as may be prescribed, at such rates as specified in the First Schedule. Where any works contract involves more than one i

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