. INCIDENCE OF TAX
The Goa VAT Act, 2005 is introduced w.e.f. 1-4-2005 in replacement of Goa Sales Tax Act, 1964. Under this Act, the tax is payable on sale of goods effected by a dealer in State of Goa. The tax is payable on sale of goods. There is no scheme for levy of purchase tax. The sale of goods includes transfer of property in goods involved in execution of works contract, lease transactions by way of transfer of right to use any goods for any purpose, hire purchase and installment transactions, sale of capital goods, scrap, etc.
2. REGISTRATION OF DEALER
(i) A dealer is required to register in the following circumstances:
(a) When turnover exceed following limits:
Rs.10,000/- in case of non-resident dealer and casual trader.
Rs. 1,00,000/- incase of importer/manufacturers
Rs. 5,00,000/- in any other case.
(b) when he is registered or liable under CST Act, 1956.
(c) when a person succeeds business of a dealer due to death or transfer.
(ii) Application for registration in Form VAT-I should be filed within 30 days from date of commencement of liability and in case of succession within 60 days along with receipted challan for registration fees. Registration is valid for three financial years.
(iii) A dealer can also apply for voluntarily registration along with registration fees and same is valid for one financial year.
(iv) An employer whose liable to deduct tax at source from contract payments should apply for registration in form VAT-XXIV.
RENEWAL
With effect from 2011-12, the Renewal of Vat Registration is required to be done within 30 days from the expiry of the Registration Certificate. i.e. Registrations Expiring as on 31-3-2011 need to be renewed on or before 30-4-2011. Delay in Renewal shall attract Penalty.
3. COMPOSITION
The following categories of dealers are eligible for composition of tax:
Sr. No. Class of Dealers Turnover Rate of Composition
1 Dealer other than the dealer of liquor in packed bottles, dealer effecting sale by transfer of riot to use any goods and importer Rs. 80 lakhs 1%
2 Reseller of liquor in packed bottles Rs. 80 lakhs 2.5%
3 Hotel, restaurant, eating house, refreshment room, boarding establishment serving food and non alcoholic beverages; other than starred category hotel, including establishment serving fast food Rs. 80 lakhs 4%
4 Hotel including Bar and Restaurant, serving food, alcoholic and non-alcoholic beverages. Rs. 80 lakhs 8%
5 Works contractor other than importer Rs. 80 lakhs 4%
6 Sale of cooked food and non-alcoholic beverages by s****s alloted by Tourism Department. Rs. 10 lakhs Rs. 25000/- per year
Turnover includes taxable and non-taxable goods. The certificate is valid for one year. Benefit of input tax credit is not available. This tax cannot be separately recovered from customers.
4. RATES OF TAX
Tax on turnover of sales is as follows:
1 Goods specified in Schedule A 1 paise in a rupee
2 Goods specified in Schedule B 5 paise in a rupee (w.e.f. 5-5-2010)
3 Goods specified in Schedule C @ shown against each entry
4 Goods specified in Schedule D Nil tax
5 Any goods 12.5 paise in a rupee
6 For exporters Zero rate
7 Packing materials @ of tax payable on sales of goods packed
5. PAYMENT OF TAXES
The dealers are required to pay tax in challan Form VAT–V as under:
(i) If monthly tax liability exceeds Rs. 1 lakh - within 20 days from end of the month.
(ii) If monthly tax liability is less than Rs. 1 lakh - within 25 days from end of the month.
(iii) Composition of tax— within 30 days from end of the quarter.
6. FILING OF RETURNS
Returns are to be filed quarterly in Form VAT– III (regular)/ VAT-IV (composition) within 30 days after end of the quarter along with receipted challans. A revised return can be filed within 1 year following the last date prescribed for furnishing original return or before issue of assessment notice, whichever is earlier.
With effect from the first quarter of 2011-12, commencing from 1-4-2011 to 30-6-2011, all the dealers who have registered themselves under the Goa Value Added Tax Act, 2005 (Goa Act 9 of 2005) including those who have opted for composition of tax under section 7 of the said Act, and the Central Sales Tax Act, 1956 (Central Act 74 of 1956), and whose turnover for the financial year 2010-11 has exceeded Rs. 50 lakhs (Rupees fifty lakhs only), shall file their quarterly returns online through electronic system. The first compulsory e-return for these dealers shall be due on 31-7-2011.
7. INPUT TAX CREDIT IS AVAILABLE ON FOLLOWING:
(a) Goods purchased for packing taxable goods.
(b) Purchase of raw materials for manufacture of taxable goods.
(c) Purchase of capital goods used in manufacture of taxable goods.
(d) Goods purchased for use in the execution of works contract.
(e) Goods purchased for transfer under right to use.
(f) Goods purchased for sale in the course of Inter-State Trade.
(g) Goods purchased for sale in the course of export outside the territory of India.
(h) Entry Tax paid on goods brought for use or consumption except on capital goods and item covered under Schedule ‘G’. In case of stock transfers, it will be in excess of 2%.
(i) In excess of 2% tax paid on goods other than capital goods used in the manufacture or processing of finished goods, which are dispatched outside Goa on stock transfer.
(j) In order to claim input tax credit purchases must be supported by Tax invoice, wherein tax element is shown separately.
8. INPUT TAX CREDIT IS NOT AVAILABLE ON FOLLOWING:
(a) Imported goods.
(b) Inter-state purchases or purchases made from outside Goa.
(c) Purchases of raw materials for manufacture of tax-free goods.
(d) Purchases from unregistered dealers.
(e) Purchase of goods for packing tax-free goods.
(f) Purchase of goods specified in Schedule ‘G’.
(g) Purchase of goods, which are not sold because of theft or destruction.
(h) Taxable goods purchased from another registered dealer for resale but given away by way of samples or gifts.
(i) Capital goods, industrial goods and packing materials covered under Schedule B utilized for the purpose other than covered in the prescribed declaration in Form VAT–XXX.
(j) Goods purchased by a dealer, who has opted for composition of tax.
(k) Capital goods purchased or paid before appointed date.
(l) Capital expenditure incurred before the date of registration.
(m) Capital goods used in the manufacture of tax-free goods.
(n) Capital goods not connected with the business of the dealer.
(o) Capital goods used in generation of energy/power including captive power.
(p) Motor cars, its accessories and spare parts.
(q) Unsold stock of goods held at the time of closure of business.
(r) When original tax invoice is not available and tax is not shown separately therein.
(s) Up to 4% of tax paid on goods other than capital goods used in the manufacture or processing of finished goods, which are dispatched outside Goa on stock transfer, as per Notification No. 4/5/2005-Fin(R&C)(5) dt. 31-3-2005.
(t) Goods purchased for specific purpose and input tax credit availed, but subsequently it is used for other purpose wholly or partly, the input tax credit should be reduced proportionately at the time of utilization of goods and reverse tax credit entry should be taken.
(u) If purchase is not supported by tax invoice or tax element is not shown separately, no input tax credit will be admissible.
(v) Input tax paid on goods sold which are exempt from payment of tax by specific notification under this Act or under Central Sales Tax Act, 1956.
(w) Input tax paid on motor vehicle including car, three wheeler under this Act or under the Entry Tax on import of such vehicle before grant of registration mark under M.V. Act, when such vehicle is resold for true value or otherwise by a registered dealer.
(x) Input tax paid on raw materials used for manufacture of ready mixed concrete.
(y) Input tax paid on Naphtha used as raw material by chemically fertilizer industry.
(z) Entry tax paid on capital goods brought for use or consumption including items covered under Schedule ‘G’. Input tax credit on other goods, up to of 2%, in case of stock transfers.
9. NET TAX PAYABLE AND REFUND OF INPUT TAX CREDIT
Monthly net tax payable is difference between output tax payable on sale of goods after deducting eligible input tax credit on purchases. The excess input tax credit is required to be adjusted against tax payable under Goa Tax of Entry of Goods, 2000 or under Central Sales Tax Act, 1956. Input Tax credit remaining after adjustments can be carried over up to end of next financial year. The balance remaining input tax credit is refunded within 3 months from end of the respective year. In case of exporter, refund of excess input tax credit is allowed within 3 months from end of the quarter against filing application in Form VAT XXVI.
10. ASSESSMENT
Returns filed are accepted as self assessed. However, 20% of the dealers can be selected for scrutiny assessment. No assessments can be made after expiry of 2 years from end of the year in which the return is filed.
11. APPEALS
The First Appeal against assessment order lies before the Appellate Authority within 60 days from date of receipt of order. The Second Appeal against the First Appeal lies before the Administrative Tribunal within 60 days from date of receipt of order. A revision application to the High Court can be made within 30 days from date of the Judgment.
12. VAT AUDIT
Every dealer whose gross turnover exceeds Rs. 1 crore in a year or input tax credit is more than Rs.10 lakhs in a year, his account books are required to be audited by a Chartered Accountant and audited report in FORM VAT-XV should be submitted to the Appropriate Assessing Authority within 10 months from end of the relevant year. Failure attract penalty upto maximum of Rs. 1 lakh.
13. NOTICE OF CHANGES IN BUSINESS
A dealer is required to give information to the Assessing Authority regarding change in ownership of business and other changes in business such as opening of new place, change in name or nature of business, change in declared bank accounts etc. within 30 days of the happening of such event.
14. WORKS CONTRACT TRANSACTIONS
The sale price of goods used/involved in the execution of works contract is determined by making deduction specified in the TABLE which ranges from 30% to 80% depending upon the classification of works Contract (Rule 4(A)).
The sale value so arrived is taxable at 8% and is eligible for input tax credit, as per rules.
An employer who has awarded works contract is required to deduct tax at source @2% on the value of works contract. However, if value of works contract is less than Rs. 1 lakh or when cost of materials used in execution of works contract is less than 10% of contract value, TDS need not be made.
The employee is required to obtain registration certificate. The tax deducted should be deposited within prescribed time of 20/30 days; issue TDS certificate in Form VAT-VII to the contractor and file prescribed statement in Form VAT-XXVII for every quarter before Commissioner within 30 days from end of quarter.
15. GOA VALUE ADDED TAX DEFERMENT-CUM-NET PRESENT VALUE COMPULSORY PAYMENT SCHEME, 2005
The Small/Medium/Large Scale Industrial units in Goa which were eligible for exemption from tax under Entry No. 68/85 of IInd Schedule of GST and notification under 8(5) of CST are entitled to avail benefit of the Scheme for balance unexpired exemption period from 1-4-2005 as under:
1st option:— Charge applicable rate on sale of manufactured goods under Goa VAT Act and CST Act and deposit in Government Treasury 25% of net tax payable and retain balance amount of 75%.
2nd option:— Exercise option only for local tax under Goa VAT Tax Act and continue to claim exemption from CST under notification issued under CST Act, 1956 subject to production of C Declaration Forms.