INTRODUCTION OF VAT AUDIT
In India, VAT Audit is compulsory in all except 4 States, (subject to Turnover limits for the dealers)
Till recently, Delhi was a part of this list. However, the Delhi Government has notified that a Dealer with a Turnover of over Rs. 10 crore has to submit a VAT Audit report. If, in respect of any particular year, the gross turnover of a dealer exceeds sixty lakh rupees or such other amount as may be prescribed, then, such dealer shall submit a report in such manner, form and period as may be notified by the Commissioner.
WHO IS LIABLE FOR VAT AUDIT
S.N.Nature of the Dealer –Based upon TurnoverExemption , if any.
- Dealers whose Gross Turnover does not exceed Rs.1 croreNot liable for VAT Audit
- Dealers whose turnover exceeds Rs. 1 crore but is less than Rs. 10 croreForm of Audit Report and its time and manner yet to be notified by the Commissioner.
- Dealers whose Gross Turnover is Rs. 10 crore or more
- Dealers exclusively dealing in Commodities listed in first schedule to the ACT
- Dealers with 100 % export Turnover.
TIME LIMIT AND PENALTY
Audit Report in Form AR?1 to be submitted within Seven and half months from the date of the Financial year.?
As per section 86(18) of Delhi VAT Amendment Act, 2013, in case the dealer fails to comply with the provision of audit, the dealer shall be liable to pay penalty, a sum equal to 1% of his Turnover or sum of one lakh rupee, whichever is less.
CALCULATION OF GROSS TURNOVER
- Taxable Sales (including Central Sales)
- Consignment Sales/ Stock Transfer
- Job Work Charges (In case of Works Contract, the full value of the contract is considered)
- Exempted Sales -
- Goods specified in the First Schedule
- Penultimate Exports u/s 5(3) of the CST Act
- Labour & Service Charges involved in the execution of Works Contract
- Sale of Capital Goods (Refer section 6(3) of DVAT)
- Dealers specified in the Fifth Schedule Others
How to Calculate Gross Turnover
Sale within Delhi Taxable under DVAT ACT XXX
Add:?Inter State Sale XXX
Add:? Sale in Course of Import and export including penultimate export XXX
Add:? Stock Transfer from Delhi to Branches/agents in Other State XXX
Add:? Excise Duty (Local and Central) and Custom Duty XXX
Less:? DVAT/CST payable by the dealer .. ( If already included) XXX
Less:? Cost of Freight or delivery separately charged in the Invoice
provided that the ownership of the goods is not transferred at the buyer’s
Less:? Cost of installation separately charged in the Invoice XXX
Gross Turnover XXXX
Points for Discussion –Gross Turnover ?
- Turnover as per DVAT Return or P & L Account.
- Turnover of Delhi office or Entire Entity
- Turnover of 2011?12 and 2012?13?A criteria
- Exemption to Dealers exclusively dealing in Exempted Goods.
- Exemption to Dealers with 100 percent Export Turnover