17-05-2013, 11:56 AM
Tamil Nadu Value Added Tax Act 2006
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VAT Category:
C – Capital Goods;
E – Exempted;
I – Import;
O – Inter-State Purchases requiring no Form C;
R – Local Purchase Input (First Schedule);
A – Purchases effected through agents / branches;
B – Industrial Input.
What is VAT?
VAT is a multi point levy where the tax paid on local purchases from the registered dealer can be set off against the tax payable on the sale of goods, other than special goods.
How is the method of calculation of determining the tax liability under the present Sales Tax system different from this method ?
In the present Sales tax system, tax liability of a dealer for a particular period is determined using the multiplication method i.e. The taxable turnover of a dealer for a particular period is multiplied by the rate of tax applicable to that turnover. In VAT, the method adopted is Input Tax Credit method as stated above. This is the only difference between the present Sales Tax system and the VAT
What are rates of tax under VAT?
The rates are 1%, 4% and 12.5% on goods eligible for input tax credit.
What a special rate of tax other than above 3 rates?
There are special rates of tax on certain goods which are kept out of
VAT. No input tax credit is allowable for these goods.(e.g) Petro
Who are dealers under VAT?
A dealer is a person who purchases, sells, supplies or distributes the goods in
the course of his business for valuable consideration. The VAT Act includes:
(1) Local authority, Company, Hindu undivided family,
Association of persons, Firm
(2) Casual trader, factor, commission agent, delcredere agent, auctioneer, local branch of the firm or company situated outside the State
(3) Person who effects transfer of property in goods other than by way of sale
(4) dealer in hire purchase, works contract, person who transfers right to use the goods
(5) Dealer in eatables including food and drinks (ie., hotels, restaurants and sweet stalls).
(6) Port Trust, Railway Administration, Shipping, Transport and Construction Companies, Air Transport Corporation and Airlines.
(7) Any person holding permit for transport vehicles
(8) Tamil Nadu State Road Transport Corporation
(9) Customs Department, Insurance Company, Advertising
Who are liable for Registration?
1) Those dealers whose total turnover in respect of purchase and sales
in the State is not less than Rs.10 lakhs for a year are to get
registered under the Act.
2) The other dealers whose total turnover for a year is not less than Rs.5 lakhs shall get registered.
3) Casual Traders, agent of non-resident dealer and dealers in jewellery irrespective of quantum of turnover shall obtain registration.
4) Those dealers who intend to commence the business, on option, may obtain registration.