Wednesday 22 February 2012

Issues in e-payment of Advance Tax under Kerala VAT

The Kerala Commercial Taxes department prides itself on being  in the forefront of computerisation initiative of VAT administration in the country. This has led to 100% e-filing of returns by all registered dealers. The enabling of e-payment of taxes from 01-09-2009 onwards (compulsoy e-filing of returns was introduced from 01-01-2009 onwards) has helped a great deal to simplify the tax remittance process (as well as tax collection process on department side).

This e-payment facility was extended to Advance Tax Payments. Advance tax is attracted by certain evasion prone commodities at the check post when they enter the State Border. This post is to describe the procedure and discuss some relevant aspects in this regard.

Access the website https://comtax.kerala.gov.in/web/iCOMITRAX/loginRPS.jsp. Login using the relevant TIN and password (An online demo facility at http://www.keralataxes.org/ with 1) Username 32010707362, password–TEST and 2) Username 32000044004, password – TEST, as per CIRCULAR No.32/07, does not seem to work now).

On the Home page, from List displayed on left select 'Advance Tax'. This link enables the dealer to remit AT through online in bulk and utilize the same as per the requirement of the dealer.

Next page displays 2 options,
Option 1 - Advance tax payment for checkpost transaction
Option 2 - Advance payment of tax for KGST(90%)/ Works Contract


Clicking on Option 1 leads to the page that lists out the steps in this module as,
1. Enter payment particulars
2. Make e-payment
3. Status of payments
4. New utilisation
5. Modify utilisation
6. Submit/ Print utilisation receipt
7. Reports (Payments/Utilisations)


Option 2 lists out following
1. Enter payment particulars
2. Make e-payments
3. Status of payment

In most cases, dealers are concerned with 'Option 1 - Advance tax payment for checkpost transaction' and in this instance we need the following details ready in hand to successfully complete the Advance tax remittance,

1. Payment particulars - Application Date, Advance Tax Amount, Remarks.

Advance tax amount can be a rounded sum or the tax amount required to be remitted for a particular load of vehicle.

2. Utilisation details - The 'Concept of Utilisation' is explained in 'Hand book of e-services' as 'The remitted amount can be utilized, as per the requirement of the dealer. After successful utilization, if any balance amount is available in the credit of the dealer, the same could be utilized for any future requirements, as desired.'
In practicality this translates as 'Unless and until a specific utilisation is generated for the amount remitted as Advance Tax, the credit for the same will not be available to the dealer in the next return.'i.e. Advance tax remitted will lie idle without showing any credit in name of the dealer, though the dealer has remitted the same to the department.

The utilisation details include,
(a) VEHICLE DETAILS
Vehicle number, Driver License No., Vehicle type, Driver name, Driver Address, Expecting Check post, Expecting Date.

(b)TRANSACTION DETAILS -
 (i) Consignor/Consignee Details - Registration Status, TIN, Name, Address, State, C.S.T. ID
 (ii) Other Details - Commodity, Rate of Tax, Invoice No. , Invoice Date, Qty, Qty Unit, Weight, Weight Unit, Invoice value, Freight Charge, OtherCharges, Total Value, Tax Due, Cess amount, Total Tax amount.

It is pertinent to note in this case that the Utilisation of the Advance tax can be generated only for the commodities listed in the AT(Advance Tax)  module.Currently this list includes 31 items as mentioned below,

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No.Commodity IdCommodityRate of Tax
11204CARDAMOMS4
21246CASHEW, RAW4
31359CERAMIC TILES/VITRIFIED TILES12.5
41404RUBBER WOOD4
51602BITUMEN4
61660COFFEE BEANS4
71959CUDDAPPAH STONE SLABS12.5
82577ELEVATORS12.5
92829FIRE WORKS12.5
103302GRANITE SLABS12.5
113514HIDES AND SKINS, RAW (OTHER)4
12361ARECANUT4
133690IRON AND STEEL4
143951LIFTS12.5
154160MARBLE SLABS12.5
164864PACKING CASES4
175043PEPPER4
185320PLYWOOD12.5
195633READYMIX CONCRETE12.5
205896SAND 4
216241SOFT WOOD 4
226794TIMBER12.5
237629DAY OLD CHICKS12.5
247630GLASS12.5
257657SPLINTS FOR MATCH4
267730GRANITE TILES12.5
277731MARBLE TILES12.5
287740GENERATORS4
297752VENEER SHEETS FOR PLYWOOD4
307855CHICKEN AND POULTRY - LIVE, FROZEN OR PROCESSED12.5
31825BLACK BOARD12.5


Once the utilisation is generated, the credit will be shown in next return automatically. After entering the details regarding utilisation, for printing and submitting the same use 'Submit/Print Utilisation Receipt' link in the Advance Tax module.

The module also gives the option to change/modify any utilisation that has not been submitted yet.

'Reports (Payments/Utilisations)' link gives details of the Total Advance Tax payment made, the Total amount Utilized for various transactions and the balance amount that is available in credit of the dealer. 






Monday 6 February 2012

KERALA VAT

The Kerala Value Added Tax Act, 2003(30 of 2004)was passed by the Kerala Legislative Assembly in 2003. It received the assent of the President of Indian the 10th

December, 2004 and was published in the Kerala Gazette Extra ordinary dated As per notification issued in G.O.(P) No.19/05/TD dated 9the February, 2005 and published as SRO.139/2005 in the Kerala Gazette Extraordinary No.315 dated 9th February 2005, the Act came into force with effect from the 1st day of April 2005.
ACT  - THE KERALA VALUE ADDED TAX ACT, 2003.
The 'Commercial Taxes Department, Govt. of Kerala' is the entity concerned with the implementation of VAT in the state of Kerala. For effective implementation, The Department issues from time to time, certain Notifications- for taking care of procedural aspects of enactment, and Circulars- which are normally explanatory/interpretative or relax the rigour of law administered. For instance,Notification No. 139/05 (S.R.O. No.139/05 dated 09.02.2005) notifies that KVAT Act is coming in force from 01.04.2005 onwards and VAT Circular No.5/05 (ie. Circular No.5 of 2005) explains the salient features of KVAT Act, 2003. In addition, certain proceedings are issued in cases where Clarifications are sought u/s 92 by any party.

Kerala is the first State in India to facilitate electronic filing of returns to all dealers having VAT registration and made it compulsory from 01-01-2009 onwards(Circular No. 14/09). The Commercial Taxes Department has also introduced e-payment to simplify the tax remittance process (mandatory from 01-09-2009 onwards - Circular No. 14/09).


ACT - THE KERALA VALUE ADDED TAX ACT, 2003
The return filing dates under Rule 22 of the KVAT Rules, 2005 have been revised as under after the implementation of mandatory e-Filing and e-Payment,

Every dealer whose annual net tax payable
for the preceding year was 
Latest by Date
Rupees ten lakhs and aboveOn or before the fifteenth day of the
month following the return period
Above Rupees two lakhs but
below Rupees ten lakhs
On or before the twentieth day of the
month following the return period
Above Rupees twenty five thousand
but below Rupees two lakhs
On or before the twenty-fifth day of the
month following the return period
OthersOn or before the twenty-fifth day of the
month following the return period


RULES -  THE KERALA VALUE ADDED TAX RULES, 2005
DEPARTMENT - THE COMMERCIAL TAXES DEPARTMENT, GOVT OF KERALA
OFFICIAL HELP LINE -  
   HELP LINE TOLL FREE 1800 425 4777 MOBILE 9446505527
   CHECK POST COMPLAINT CELL 155300 Mob:0471 155300   
   CITIZENS CALL CENTRE - HELP LINE 155300 MOBILE 0471155300

You may also be interested in going through http://keralataxes.gov.in/history.pdf, strictly for academic purpose.

Introduction to VAT

VAT or Value Added Tax is nothing but our good old Sales Tax with the key difference that the cascading effect of Tax is (i.e. Tax on Tax) eliminated ( so they say!) . The VAT system also envisions reduction in the number of Tax evasion cases by creation of traceable 'Audit Trail'. The following table might shed some light on the real world situation,

Seller
Buyer
Cost
Value
Addition
Sales
Price
Tax
Rate
Invoice
Value
VAT
Sales Tax
Payable
Tax
payable
Tax
Credit
Net
AB1,000.004%1,04040.000.0040.0040.00
BC1,040.00100.001,140.004%1,18645.6040.005.6045.60
CD1,185.60100.001,285.604%1,33751.4245.605.8251.42
DE1,337.02100.001,437.024%1,49557.4851.426.0657.48




VAT was implemented in India under 'Tax Credit' method. As Sales Tax is in the purview of State Governments, different states had drafted different Acts and Rules for the implementation of the same. To help states embrace VAT system of taxation, the Central Govt had promised to phase out the levy of CST(Central Sales Tax) in 3 years (i.e. 4% in 2005-06, 2% in 2006-07 and 0% from 2007-08 onwards). Yes, this still remains a promise.

In Kerala the VAT was introduced by enacting 'THE KERALA VALUE ADDED TAX ACT, 2003' and 'KERALA VALUE ADDED TAX RULES, 2005'. Through this blog, I plan to discuss various practical issues of VAT in the state of Kerala.

I would also suggest that for a more comprehensive understanding of the VAT - please go through http://en.wikipedia.org/wiki/Value_added_tax.