A PROJECT REPORT

ON
A STUDY ON VAT AUDIT
SUBMITTED TO THE UNIVERSITY OF PUNE
IN PARTIAL FULFILLMENT
FOR THE AWARD OF
MASTER DEGREE OF COMMERCE ( M COM. )

SUBMITTED BY
HAFIZA SAYYED

UNDER THE GUIDENCE OF

PROF. M.G.MULLA
DEPARTMENT OF COMMERCE
ABEDA INAMDAR SENIOR COLLEGE
OF ARTS, SCIENCE & COMMERCE
CAMP, PUNEYEAR ( 2010-2011 )

ACKNOWLWDGEMENT

For I would like to solicit my thanks to our project guide Prof. M.G.Mulla
for his valuable guidance and encouragement throughout the project
preparation .This study has given me a great practical exposure to the actual
proceedings as regards the Value Added Tax Audit (VAT), & would further
like to extend my gratitude towards MILIND V. JOSHI & CO.(C.A), Pune,
for their extended support & guidance in completion of this study.

Lastly I

would also express my acknowledgement towards my friends & family for

their enormous guidance & support in preparation of this project.

DECLARATION

I Hafiza pursuing M. COM II from Abeda Inamdar SR. College hereby

declared this project entitled A Study on VAT AUDIT is submitted to the
Department of Cost & Works Accounting.It is my original Works & has not
been submitted to any other university or organization for the award of any
degree or diploma. The recommendation made with its conclusion is of my
own & I am entirely responsible in making this project, the views of the
organization.
Name:- Hafiza Razzaq Sayyed
Date:- 03/03/2011
Place:- Pune

PREFACE
Often project work at the college level is assumed to be a facile task. But,
from my understanding and the efforts, which have been put in the last many
days, it has been realized that this report, which consists an analysis of dayto-day issues, may appear to be an overtly simple job and prove to have
tremendous scope and depth
It is a meek and proletarian effort in studying the organization of Milind V.
Joshi & Co. nonetheless, I have done it whole-heartedly and hope to succeed
in it.
To do this project, I took up the challenge enthusiastically. I have put forth
in this project the modest product of our efforts. I have not restricted myself
to a single topic. I have undertaken many concepts for study. The broad
areas for of my study consist of Value Added Tax i.e. VAT, VAT Audit &
different forms related to VAT.

CHAPTER

1.

2.

3.

4.

5.

6.

TOPIC

PAGE
NO.

INTRODUCTION TO STUDY

1-3

RESEARCH METHODOLOGY

4-11

VAT

VAT AUDIT

DATA ANALYSIS & INTERPRETATION

OBSERVATIONS & FINDINGS

12-30

31-37

38-63

64-70

QUESTIONARIE
7.

8.

9.

71-72

CONCLUSION & SIGGESTION

BIBLIOGRAPHY

73

74

CHAPTER 1
INTRODUCTION TO STUDY

Study On Vat Audit

This project was carried out with the intention to gain practical
knowledge about the topic A study on VAT Audit . Theoretical work is
always easier than practical knowledge, only we can know about the subject
deeply and correctly. Thus to fulfill this aim, Milind V. Joshi & Co. was
chosen to collect some practical information about VAT Audit.
Being Commerce students it is very necessary to get proper exposure to the
corporate culture and some deep knowledge regarding the area of interest.
Therefore the Project Work helps in getting depth knowledge about the
working culture of an organization enabling us to learn through hands on
experience. It helps in facing the realities and also the difficulties of
corporate world, gives the pleasure to learn, building of confidence and also
inculcates professionalism which is helpful in shaping up of a bright career
in future.
It had been very significant study, which was helpful in providing the best
knowledge and experience about the VAT Audit. Which is present in most
of the companies throughout the world? The knowledge had boosted my
confidence and gave me the basic idea about all the techniques, methods and
process of VAT Audit & different forms related to VAT.
This project would guide those who are new to the topic and study on VAT
Audit would also help them to understand the whole process by reading and
looking carefully this project on VAT Audit & different forms related to
VAT & procedure adopted by MILIND V. JOSHI & CO.(C.A) in
undertaking VAT Audit Work.

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COMPANY PROFILE
Company Name:- Milind V. Jishi & Co.
Address:- Panagara Height,
S No. 68, Sadashiv Peth,
Off Laxmi Road, Pune-411030.

Milind V. Jishi & Co. was established in the year 1998. Mr. Milind V. Joshi
are proprietor of this company. It is a wall known consultancy in Pune. It
deals with Income Tax & Sales Tax practitioners. The company provides
services to many companies in Pune. The co. also provides consultation in
replying the queries raised by the Government Department. It helps many
organization registered under MVAT ACT in undertaking VAT Audit work
in compliance with the said Act.
The oraganisation is aided & headed by professionals having versatile
working experience in the capacity of head of the departments like Income
Tax & Sales Tax. It helps many commercial & general stores which deals in
sales & purchase of goods.
The organization at present is engaged in soliciting advices to various firms
in & around Pune in respect of Income Tax & Sales Tax Laws. In house
training programs are conducted by the company for their employees so as
to upgrade their skills in these laws & to provide better services to their
clints.

CHAPTER 2
RESEARCH METHODOLOGY

Study On Vat Audit

2.1 MEANING OF RESEARCH

Research in common parlance refers to a search for knowledge. Once can
also define research as a scientific and systematic search for pertinent
information on a specific topic. In fact, research is an art of scientific
investigation. The Advanced Learners Dictionary of Current English lays
down the meaning of research as a careful investigation or inquiry specially
through search for new facts in any branch of knowledge.
Redman and Mory define research as a systematized effort to gain new
knowledge.2 Some people consider research as a movement, a movement
from the known to the unknown. It is actually a voyage of discovery. We all
possess the vital instinct of inquisitiveness for, when the unknown confronts
us, we wonder and our inquisitiveness makes us probe and attain full and
fuller understanding of the unknown. This inquisitiveness is the mother of
all knowledge and the method, which man employs for obtaining the
knowledge of whatever the unknown, can be termed as research. Research is
an academic activity and as such the term should be used in a technical
sense.
According to Clifford Woody research comprises defining and redefining
problems, formulating hypothesis or suggested solutions; collecting,
organizing and evaluating data; making deductions and reaching
conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating hypothesis. D. Slesinger and M. Stephenson
in the Encyclopedia of Social Sciences define research as the manipulation
of things, concepts or symbols for the purpose of generalizing to extend,
correct or verify knowledge, whether that knowledge aids in construction of
theory or in the practice of an art. Research is, thus, an original contribution
to the existing stock of knowledge making for its advancement. It is the
persuit of truth with the help of study, observation, comparison and
experiment. In short, the search for knowledge through objective and
systematic method of finding solution to a problem is research.

Study On Vat Audit

2.2 DEFINATION OF RESEARCH

In order to plan and carry out research, it is necessaryfor you to know what
we mean by research-in general, as well as in the specialized fields of
language teaching and language acquisition.
Research is an ORGANIZED and SYSTEMATIC way of FINDING
ANSWERS to QUESTIONS.
SYSTEMATIC because there is a definite set of procedures and steps
which you will follow. There are certain things in the research process which
are always done in order to get the most accurate results.
ORGANIZED in that there is a structure or method in going about doing
research. It is a planned procedure, not a spontaneous one. It is focused and
limited to a specific scope.
FINDING ANSWERS is the end of all research. Whether it is the answer to
a hypothesis or even a simple question, research is successful when we find
answers. Sometimes the answer is no, but it is still an answer.
QUESTIONS are central to research. If there is no question, then the
answer is of no use. Research is focused on relevant, useful, and important
questions. Without a question, research has no focus, drive, or purpose.

Study On Vat Audit

2.3 GOALS
By the time you're finished with this module, you should be able to...
...Understand and interpret research reports when you read them, indentifying
their major elements and underlying methodologies....Plan and carry out your
own research projects in the field of TESL and language acquisition.
...This module is intended to supplement what you will learn from your
coursework and reading. It may also help you get an idea of what research is
before you take courses in research methods....This module will also
introduce you to basic terminology and concepts common to the research
typically done by TESL and language acquisition experts.

2.4 OBJECTIVES OF RESEARCH

The purpose of research is to discover answers to questions through the
application of scientific procedures. The main aim of research is to find out
the truth which is hidden and which has not been discovered as yet. Though
each research study has its own specific purpose, we may think of research
objectives as falling into a number of following broad groupings:
1. To gain familiarity with a phenomenon or to achieve new insights into it
(studies with this object in view are termed as exploratory or formulative
research studies);
2. To portray accurately the characteristics of a particular individual,
situation or a group (studies with this object in view are known as
descriptive research studies);
3. To determine the frequency with which something occurs or with which it

is associated with something else (studies with this object in view are known
as diagnostic research studies);
4. To test a hypothesis of a causal relationship between variables (such studies are known
as hypothesis-testing research studies).
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In Research Methodology mainly Data plays an important role,

The Data is divided in Two parts as follows:
1) Primary Data
2) Secondary Data
1) Primary Data:In this project is collected directly by personal interaction with the
persons concerned. This was of good use in understanding the
process This was done through observation of some quantitative
measurements or the data with the help of personal interviews,
telephone interviews, mailing of questionnaires schedules etc.
2) Secondary Data:In this project is collected from the various books, circulars &
material reports etc. The data was stored by the organization &
provide by the concern person. The various information is taken
out regarding the subject VAT as well other concepts related to the
subject VAT. The last years data stored was also gone through.
The data collected is limited due to companys rules of not
disclosing the facts.
In execution of this project the above specified data was collected
by the way of personal interactions & indirect information
available in the form of reports, books ect.

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2.5 INTER-RELATIONSHIPS
Now that you understand basic, applied, and practical research,
let's look at one more way these three types of research work
together.

Research is like a plant

that grows and grows
and grows and grows...

When it is grown
it throws off seeds of all types
(basic, applied, and practical),
which in turn sprout and
create more research projects.

The process continues with

all of the new research 'plants'
throwing off seeds, creating
additional, related research projects
of various types.
Soon there is a body of basic, applied, and practical
research projects related to similar topics. And the process goes on and on...

Study On Vat Audit

2.6 HYPOTHESIS
In deductive research, a HYPOTHESIS is necessary. It is focused
statement which predicts an answer to your research question. It is based on
the findings of previous research (gained from your review of the literature)
and perhaps your previous experience with the subject.The ultimate
objective of deductive research is to decide whether to accept or reject the
hypothesis as stated. When formulating research methods (subjects, data
collection instruments, etc.), wise researchers are guided by their hypothesis.
In this way, the hypothesis gives direction and focus to the research.
Here is a sample HYPOTHESIS:
The "Bowen technique" will significantly improve
intermediate-level, college-age ESL students'
accuracy when pronouncing voiced and voiceless
consonants and tense and lax vowels.

Sometimes researchers choose to state their hypothesis in "null" form.

This may seem to run counter to what the researchers really expect, but
it is a cautious way to operate. When (and only when) this null
hypothesis is disproved or falsified, the researcher may then accept a
logically "alternate" hypothesis. This is similar to the procedure used in
courts of law. If a person accused of a crime is not shown to be guilty,
then it is concluded that he/she is innocent.
Here is a sample NULL HYPOTHESIS:
The Bowen technique will have no significant
effect on learners' pronunciation.
In heuristic research, a hypothesis is not necessary. This type of research
employs a "discovery approach." In spite of the fact that this type of research
does not use a formal hypothesis, focus and structure is still critical. If the
research question is too general, the search to find an answer to it may be
futile or fruitless. Therefore, after reviewing the relevant literature.
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Study On Vat Audit

2.7 HYPOTHESIS RESEARCH METHODOLOGY

Define hypothesis-what are the nature, scope and testing of hypothesis?
Answer: A tentative proposal made to explain certain observations or facts
that requires further investigation to be verified. A hypothesis is a
formulation of a question that lends itself to a prediction. This prediction can
be verified or falsified. A question can only be use as scientific hypothesis,
if their is an experimental approach or observational study that can be
designed to check the outcome of a prediction.
Nature of hypothesis :
N the various discussions of the hypothesis which have appeared in works
on inductive logic and in writings on scientific method, its structure and
function have received considerable attention, while its origin has been

comparatively neglected. The hypothesis has generally been treated as that

part of scientific procedure which marks the stage where a definite plan or
method is proposed for dealing with new or unexplained facts. It is regarded
as an invention for the purpose of explaining the given, as a definite
conjecture which is to be tested by an appeal to experience to see whether
deductions made in accordance with it will be found true in fact. The
function of the hypothesis is to unify, to furnish a method of dealing with
things, and its structure must be suitable to this end. It must be so formed
that it will be likely to prove valid, and writers have formulated various rules
to be followed in the formation of hypotheses. These rules state the main
requirements of a good hypothesis, and are intended to aid in a general way
by pointing out certain limits within which it must fall.
In respect to the origin of the hypothesis, writers have usually contented
themselves with pointing out the kind of situations in which hypotheses are
likely to appear. But after this has been done, after favorable external
conditions have been given, the rest must be left to "genius," for hypotheses
arise as "happy guesses," for which no rule or law can be given. In fact, the
genius differs from the ordinary plodding mortal in just this ability to form
fruitful Hypotheses in the midst of the same facts which to other less gifted
individuals remain only so many disconnected experiences.
11

CHAPTER 3
VAT

Study On Vat Audit

3.1 MEANING OF VAT

Value Added Tax was first introduced in France in 1954. France became the
first European country to implement VAT. Initially it was not a complete
system of VAT, since it applied only to transactions entered into by
manufacturers and wholesalers. After that, it was supplemented by a
separate tax on services. In addition, there were special excises which were
levied on services and distribution in lieu of the tax surplus prostrations
services. The retailers and agriculturists were not included in the coverage of
VAT. VAT was extended to other activities such as energy and construction
during 1954 to 1963. However, the reforms initiated in January 1968, were
essentially for generalizing VAT to all industrial, agricultural and
commercial activities. It was extended to all transactions formerly subject to
the local tax and to the tax on services, which were then abolished. In
addition, VAT was imposed on goods transport and other transactions
formerly subject to a tax unique.
In 1971, the then prevailing buffer rule was discontinued. Accordingly, the
enterprises could benefit from the refund of their tax credit. However, there
was a ceiling on tax credit that disappeared in July 1978. General Sales
Tax, Resale Tax, Surcharge, Additional Sales Tax will be
replaced by
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Study On Vat Audit
VAT. The Central Sales Tax Act, 1956 regulating the interstate transactions of sale and purchase will continue. The

Entry Tax on Vehicles and Goods will continue.

Development of VAT in other countries has been gradual. Most of the
countries were not adopted VAT till sixties. The VAT has come to occupy
an important place in the fiscal storage over the years nearly all
industrialized countries. and large number of Latin American, Asian. This
has brought many number of countries to adopt VAT as their major form of
consumption tax. Thus, the augmentation of interest in VAT has been the
most remarkable event in the evolution of commodity taxes in the present
century. Over 120 countries worldwide have introduced VAT over the past
three decades and India is amongst the last few to introduce it.
And, as of today VAT is fairly evenly distributed throughout the world.
It is a tax on consumption. The final and total burden of the tax is fully and
exclusively borne by the domestic consumer of goods and services. It being
a tax on domestic consumption, no VAT is charged on goods exported. It is
an alternative mechanism of collection of Tax. In many respects it is
equivalent to a last point retail sales tax. Value added tax is, therefore, a
muti-stage sales tax levied as a proportion of value added (i.e. sales minus
purchaes, which is equivalent to wages plus profits).

3.2 DEFINATION OF VAT

VAT STANDS FOR VALUE ADDED TAX
VAT is a tax added to a product as it goes through stages of production.
Numerous countries have adopted this system. For many countries, VAT has
proved to be a significant source for state finance.VAT stands for valueadded tax. It is a consumption tax (CS) that is paid by the consumer.
Essentially, it is the difference between an item's price and its cost of
production. This system of taxation is mainly used in the European Union.
VAT is a multi-point sales tax unlike present Sales Tax , no concept of
taxation a FIRST / LAST POINT. Tax charged at every step of the chain at
each transaction in the production distribution system.
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3.3 VARIANT OF VAT

VAT could be levied with three specific variants, viz., (a) Gross Product
Variant, (b) Income Type Variant, and (c) Consumption Type Variant.
These variants, as shown in Exhibit 1.2, could be further distinguished
through their methods of calculation, viz., addition method and
subtraction method. The subtraction method could be further analyzed
into (a) direct, (b) intermediate, and (c) indirect subtraction method.
1) Gross product Variant:
This variant allows deductions for all purchases of raw materials and
components but no deduction is allowed for business inputs. That is,
capital goods such as plant and machinery are not deductible from the
tax base in the year of purchase and depreciation on the plant and
machinery is not deductible in the subsequent years. Thus, the economic
base of gross product variant is equivalent to Gross National Product.
In this variant of VAT, capital goods carry a heavier tax burden as they
are taxed twice. Modernization and upgrading of plant and machinery
is delayed due to this dual tax treatment.
2) Income Variant:
Unlike the gross product variant, in this variant of VAT, deductions are
allowed for purchases of raw materials and components as well as
depreciation on capital goods. It provides incentive to classify purchases
as current expenditures to claim set-off. Net investment (i.e. gross
investment minus depreciation) is taxed and, therefore, the economic
base of the income variant is equivalent to net national product. In
practice, however, there are many difficulties connected with
specification of any method of measuring depreciation, which basically
depend on the life of an asset as well as on the rate of inflation.
3) Consumption Variant:
This variant allows deduction for all business purchases including
capital assets. That is, gross investment is deducted in calculation of
value added. The economic base of the tax, therefore, is equivalent to
total private
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consumption. It neither distinguishes between capital and current

expenditures nor specifies the life of asset or depreciation allowance for
different assets. This form is neutral between different methods of
production; there would be not effect on tax liability due to the method of
production. The tax is also neutral between the decision to save or consume.
Amount the three variants of VAT mentioned above, the consumption
variant is widely used. Most countries of Europe and other continents have
adopted this variant. The reason for preference of this variant is that it does
not affect decision regarding investment because the tax on capital goods is
also set-off against VAT liability. The tax is neutral in respect of techniques
of production. The consumption variant is more in harmony with the
destination principle. In the foreign-trade sector, this variant relieves all
exports form taxation while imports are taxed. Finally, this variant is
convenient from the point of administrative expediency as it simplifies tax
administration by obviating the need to distinguish between purchases of
intermediate and capital goods on the one hand and consumption goods on
the other.

3.4 VAT RATE

15

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This indicates that VAT is collected at each stage of production and
distribution process and in principle, its burden falls on final consumers
only.
3.5 METHODS OF COMPUTATION OF VAT
VAT can be computed by adopting three different methods. These are
(i) Addition method, (ii) Subtraction method, and (iii) Tax-credit method.
These methods can be used to arrive at the VAT liability.
1) Addition method:
This method is based on the identification of value-added which can be
estimated by summation of all the elements of value-added (i.e. wages,
profits, rent and interest). This method is known as addition method or
income approach. This is in line with the income method of calculating
national income.
2) Subtraction method:
The subtraction method estimates value-added by means of difference
between outputs and inputs [(i.e. T = t (output-input)]. This is also known as
product approach and has further variants in the way subtraction is attempted
from among (a) direct subtraction method, (b) intermediate subtraction
method and (c) indirect subtraction method. Direct subtraction method is
equivalent to a business transfer tax whereby tax is levied on the difference
between the aggregate tax-exclusive value of sales and aggregate taxexclusive value of purchases. Intermediate subtraction method is based on
deduction of the aggregate tax-inclusive value of purchases from the
aggregate tax-inclusive value of sales and taxing the difference between
them.
3) Tax-credit method:
The indirect subtraction method entails deduction of tax on inputs from tax
on sales for each tax period, [i.e., t (output) t (input)]. This method is also
known as tax credit method or invoice method. In practice, most countries
use this method and employ net-consumption VAT. A comparative picture

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of the three methods of calculating VAT is presented in Table 1 The invoice
method is widely used in most VAT countries because of its inherent
advantages in calculating tax liability. First, it makes crosschecking of tax
paid at earlier stages more amenable, as dealers are required to mention the
amount of tax on invoices. Second, tax burden being dependent upon the tax
rate at the final stage, dealers at intermediate stages do not have any
incentive to seek special treatment in tax rate. And finally, it facilitates
border tax adjustments. If exports are zero-rated, it is very easily done with
this methods.
Calculation of VAT Manufacturer Wholesaler Retailer
1. a. Sales

100

200

250

Total
Economy
550

2. b. Purchases

100

100

200

300

3. c. Value
added (a-b)

10

100

50

250

10-0=10

10

25

10

20-10=10

25-20=5

55-30=25

10-0=10

15

30

30-10=20

25-30=5

65-40=25

Rate of VAT is
10% on all stages
VAT under
Subtraction method
Invoice method
Rate of Vat is 15%
at wholesaling level
and 10% at all other
stages
Subtraction method
Invoice method

17

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3.6 REASONS FOR GROWING POPULARITY OF VAT

In addition to superiority of VAT in terms of allocate efficiency, neutrality
and other economic effects that would be analyzed in the following chapter,
there are several arguments that are put forth for the adoption of VAT by a
large number of countries and its consequent growing popularity.
First, VAT helps simplifying the indirect tax system. In most countries, the
pre-VAT commodity tax systems are found to be very complicated. For
example, in Korea, there were 11 different kinds of indirect taxes before the
adoption of VAT. Eight indirect taxes that were replaced by VAT had,
among the, 53 different rate brackets.
The gross business receipts tax in the Republic of China (ROC) called
Taiwan was a multistage turnover tax.2 VAT replaced it. However, VAT
also replaced the stamp tax and the commodity taxes on some products such
as paper, plastic, leather and steel bars. In fact, all the countries that have
gone in for VAT had a genuine need for simplifying their tax systems.
Seconds, the adoption of VAT helps in reducing evasion of tax. The existing
systems of single-point or cascade type sales tax had considerable amount of
evasion. Studies related to evasion of sales tax in India, for example,
indicate that evasion ranges between 5 and 85 percent of the tax base
depending upon the type commodity.3 As against the system of
administration of sales tax, VAT requires that tax invoices must be issued by
all the dealers. The subsequent dealer would maintain these invoices in order
to benefit from tax deduction. This would enable the tax authority to cross
check the declared transactions between taxpayers, consequently reducing
the propensity to evade tax. In fact, the requirement of maintaining the
vouchers (invoices) works as self-policing the evasion of tax.
Finally, VAT has a novel feature of tax transparency. That is, the total
burden of tax on a particular commodity is clearly seen from the
transactions. Hence, the economic analysis of the tax structure is convenient.
Also, in international trade, this enhances tax neutrality. Under the sales tax
system it is difficult to estimate the exact amount of refund for export. In
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CHAPTER 6
OBSERVATIONS & FINDINGS

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MAHARASHTRA VAT FORM

FORM NO.
Form 101

SUBJECT
Application for Registration under section 16 of The
Maharashtra Value Added Tax Act, 2002

A N N E X U R
E - I - TO
A N N E X U R E - I - TO FORM 101
FORM 101
Form 102

Certificate of Registration

Form 103

Application for cancellation of Registration Certificate

Form 104

Application for certified copy of the extract from the list

of registered dealers under sub section(7) of section 16 of
The Maharashtra Value Added Tax Act, 2002

Form 105

Declaration / Revised declaration under Section 19 of the

Maharashtra Value Added Tax Act, 2002

Form 106

Declaration under Sub-Section(2)of section 19 of the

Maharashtra Value Added Tax Act, 2002

Form 107

Registration under the MVAT Act, 2002, certain

clarifications and relief.

Form 107-A

Application for administrative relief for cases covered

under section 22(8) of BST Act, 1959

Form 107-B

Application for revalidation in cases of wrong cancellation of

RC under section 22(8)

Form 107-C

Application for administrative relief in cases of change in

constitution and change of place of business

Form 108

Application for TIN

Form 210

Chalan in respect of payment made otherwise than with

return by a dealer under Maharashtra Value Added

Form 211

Application for grant of permission to file consolidated

return under section of 20 of the Maharashtra Value Added
Tax Act,2002
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Form 212

Defect notice for incomplete or inconsistent return under

sub-section (2) of section 20 of the Maharashtra Value
Added Tax Act, 2002

Form 213

Notice for payment of tax due according to a return under

section 20 of The Maharashtra

Form 221

VAT Return form for all VAT dealers other than dealers
executing works contract, dealers engaged in leasing
business, composition dealers PSI dealers and notified Oil
Companies

Form-222

VAT return form for composition dealers whose entire

turnover is under composition

Form-223

VAT return form for VAT dealers who are also in the
business of executing works contracts, leasing and dealers
opting for composition only for part of the activity of the
business

Form-224

VAT return form for PSI dealers holding Entitlement

Certificate

Form-225

VAT return form for Notified Oil Companies

Form 301

Notice under Sub- section (2),(3) or (4)of section 23 of the

Maharashtra Value Added Tax Act,2002

Form 302

Notice under sub-section (5) of section 23 of the

Maharashtra Value Added Tax Act, 2002

Form 303

Form 303

Form 304

Application for cancellation of Assessment Order under subsection (1) of section 23 of the Maharashtra Value Added
Tax Act, 2002

Form 305

Application for the issuance of direction to assessing

authority under sub-section (9) of section 23 of the
Maharashtra Value Added Tax Act, 2002

Form 306

Notice under the proviso of sub-section (1) of section 24 of

the Maharashtra Value Added Tax Act, 2002
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Form 307

Application for the rectification of mistake under subsection (1) of section 24 of the Maharashtra Value Added
Tax Act, 2002

Form 308

Stay Order under sub-section (1) of section 24 of the

Maharashtra Value Added Tax act, 2002

Form 309

Notice to a person when it is proposed to pass an Order,

which affects him adversely under section 25 of the
Maharashtra Value Added Tax Act, 2002

Form 310

Appeal against an order of assessment, interest, penalty or

fine under section 26 of the Maharashtra Value Added Tax

Act, 2002

Form 311

Application for grant of stay against order of assessment,

penalty, interest or fine under section 26 of the
Maharashtra Value Added Tax Act, 2002

Form 312

Admission memo-cum-stay order under section 26 of the

Maharashtra Value Added Tax Act, 2002

Form 313

Application by senior citizen for the disposal of appeal on

priority under sub-section (7) of section 26 of the
Maharashtra Value Added Tax Act, 2002

Form 314

Application for the purpose of proviso to sub-section (1) of

section 33 of the Maharashtra Value Added Tax Act, 2002

Form 315

Notice under Sub- section (6) of section 23 of the

Maharashtra Value Added Tax Act,2002

Form 401

Application for allotment of sales Tax Deduction Account

Number under sub-section (8) of section 31 of the
Maharashtra Value Added Tax Act, 2002

Form 402

Certificate of tax deduction at source to be given to the

dealer under sub-section (7) of section 31 of the
Maharashtra Value Added Tax Act, 2002

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Study On Vat Audit

Form 403

Yearly Statement of the tax deducted at source, to be sent

to prescribed Authority under sub-section (10) of section 31
of the Maharashtra Value Added Tax Act, 2002

Form 404

Register to be maintained by the employer who deducted

tax at source under the Maharashtra Value Added Tax Act,

2002

Form 405

Return of deduction of tax at source under sub-section (5)

of section 31of under the Maharashtra Value Added Tax
Act 2002

Form 406

Certificate regarding payments made by the principal under

the Maharashtra Value Added Tax Act, 2002

Form 407

Certificate regarding payments made by the agent under the

Maharashtra Value Added Tax Act, 2002

Form 408

Declaration by a registered sub-contractor for the purpose

of clause (f) of sub section (4) of section 45 of the
Maharashtra Value Added Tax Act, 2003

Form 409

Declaration by a registered Contractor for the purpose of

clause (g) of sub section (4) of section 45 of the
Maharashtra Value Added Tax Act, 2003

Form 410

Application for grant of certificate under sub clause (ii) of

clause (b) of sub section (1) of the section 31 of the
Maharashtra Value Added Tax Act, 2002 for deduction of
tax at source or no deduction of tax

Form 411

Certificate under sub clause (ii) of clause (b) of sub-section

(1) of section 31 of the Maharashtra Value Added Tax Act,
2002 for Tax Deduction at source or no tax deduction as
the case may be.

Form 412

Notice for forfeiture and for imposing penalty under section

60 of the Maharashtra Value Added Tax Act, 2002
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Study On Vat Audit

Form 413

Application for refund under sub-section (6) of section 32

of the Maharashtra Value Added Tax Act, 2002

Form 414

Application for clearance certificate under clause (a) of sub

section (8) of section 32 of The Maharashtra Value Added
Tax Act, 2002

Form 415

Tax Clearance certificate to be issued under Clause (a) of

Sub- Section (8) of Section 32 the Maharashtra Value
Added Tax Act, 2002

Form 416

Tax Dues certificate to be issued under Clause (b) of SubSection (8) of Section 32 the Maharashtra Value Added Tax
Act, 2002

Form 501

Application for provisional refund under sub- section (1) of

section 51of the Maharashtra Value Added Tax Act, 2002

Form 502

Order Sanctioning refund under the Maharashtra Value

Added Tax Act, 2002

Form 503

Refund payment order under the Maharashtra Value Added

Tax Act, 2002

Form 504

Refund payment order under the Maharashtra Value Added

Tax Act, 2002

Form 505

Interest payment order under the Maharashtra Value

Added Tax Act, 2002

Form 601

Application against the order for provisional attachment

under sub-section (5) of Section 35 the Maharashtra Value
Added Tax Act, 2002

Form 602

Notice under section 63 of the Maharashtra Value Added

Tax Act, 2002

Form 603

Notice under section 64 of he Maharashtra Value Added

Tax Act, 2002

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Form 701

Application to question under sub-section (8) of section 10 in

any proceeding any jurisdiction including territorial
jurisdiction of any officer or person appointed under subsection (2) of section 10 of the Maharashtra Value Added
Tax Act, 2002

Form 702

Complaint against any authority for vexatious order or wilful

underassessment under sub-section (1) of section 12 of
Maharashtra Value Added Tax Act, 2002

Form 703

Application for advance ruling under section 55 of the

Maharashtra Value Added Tax Act, 2002

Form 704

Audit report under section 61 of the Maharashtra Value

Added Tax Act, 2002,

Form 705

Intimation of acceptance of a sum by way of composition of

an offence under section 78 of the Maharashtra Value
Added Tax Act 2002

Form 706

Application for the enrolment as a Sales Tax Practitioner

under section 82 of the Maharashtra Value Added Tax Act,
2002

Form 707

List of Sales Tax Practitioners qualified under section 82 of

the Maharashtra Value Added Tax Act, 2002

Form 708

Authority for person who is a relative or a person regularly

employed under Section 82 of the Maharashtra Value Added

Tax Act, 2002

Form 709

Authority for Legal Practitioner, Chartered Accountant,

Cost Accountant or Sales Tax Practitioner under Section 82
of the Maharashtra Value Added Tax Act 2002

Form 1

Composition form for Restaurants, clubs and hotels

Form 2

Composition form for Caterers

Form 3

Composition form for Bakers

Form 4

Composition form for Retailers

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Form 5

Composition form for dealers in second hand Motor Vehicles

Form 6

Form of details of goods held in stock & capital asset as on

31.3.05 & details of set off claim
Application form for issuance of C/H/F/E-I/E-II forms

Form

70

CHAPTER 7
QUESTIONARIE

Study On Vat Audit

VAT AUDIT
NAME:ADDRESS:AGE:-

______________________________________________
_____________________________________________
______________________________________________

OCCUPATION:- ______________________________________________

1. What is VAT?
2. How is the method of calculation of determining the tax
liability under the present Sales Tax system different from
this method ?
3. What are the taxes that will be replaced by VAT?
4. What are rates of tax under VAT?
5. Is there any special rate of tax other than above 3 rates?
6. Who are dealers under VAT?
7. Who are liable for Registration?
8. What is the Registration fee?
9. Who is the registering authority?
12. How to apply for registration?
13. How is the certificate of registration issued?
14. What is exempted sale?
19. How the returns are to be filed?
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Study On Vat Audit

20. What is the mode of payment of tax?

23. Will there be any random check of accounts?

24. What are inputs?

25. What is industrial input?
26. What is input tax?
27. What is output?
28. What is output tax?
29. What is Tax invoice?
30. What is input tax credit?
34. What are the transactions not eligible for input tax
credit?

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CHAPTER 8
CONCLUSION & SUGGESTIONS

Study On Vat Audit

Thus from the above STUDY ON VAT AUDIT we can say that:1. Rate of Tax VAT proposes to impose two types of rate of tax mainly:

A ) 4% on declared goods or the goods commonly used.

B ) 10-12% on goods called Revenue Neutral Rates ( RNR ).
There would be no fall in such remaining goods.
C) Two special rates will be imposed-1% on Silver or Gold
& 20% on liquor.
3) Collection off tax by seller/dealer at each stage. The seller/dealer
would collect the tax on the full price of the goods sold and shows
separately in the sell invoice issued by him.
4) VAT is not cascading or additive though the tax on the goods sold is
collected at each stage it is not cascading or additive because the net
effect would be as follows:- the tax, previously paid on the sale of
goods, would be fully adjusted. It will be like levying tax on goods,
sold in the last state or at retail stage.

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CHAPTER 9
BIBLIOGRAPHY

Study On Vat Audit

A) INTERNET/WEBSITES:-

1)
2)
3)
4)

www.wikipedia.org
www.google.com
www.vatmaharashtra.gov.in
www.tax4india.com

B) BOOKS:Taxmann:By- Vinod Singhania & Niraj Singhania

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