Maharashtra Value Added Tax (MVAT)

VAT is a system of indirect taxation, which has been introduced in lieu of sales tax. It is the tax paid by the producers, manufacturers, retailers or any other dealer who add value to the goods and that is ultimately passed on to the consumer. VAT has been introduced in India to ensure a fair and uniform system of taxation. It is an efficient, transparent, revenue-neutral, globally acceptable and easy to administer taxation system. It benefits the common man (consumer), businessman and the Government.

VAT makes the tax structure simple, hassle-free and export-oriented. The integration of VAT with Tally will help you in the smooth functioning of your business and eliminate the complications that might otherwise arise in VAT.

VAT, a globally recognized sales tax system, has been introduced in more than 130 countries

VAT in Maharashtra is levied under a legislation known as the Maharashtra Value Added Tax Act (MVAT Act), 2002, supported by Maharashtra Value Added Tax Rules (MVAT Rules). VAT is levied on sale of goods including intangible goods.

Rate of VAT applicable in the country is between 4 % to 12.5%.

Background of VAT

Earlier the State of Maharashtra had introduced VAT in respect of very few specified items under the old Bombay Sales Tax Act.

The entire Bombay Sales Tax Act and certain related taxes got replaced by the Maharashtra Value Added Tax Act (MVAT Act), 2002 with effect from 1st April 2005

VAT, a globally recognized sales tax system, has been introduced in more than 130 countries

VAT in Maharashtra is levied under a legislation known as the Maharashtra Value Added Tax Act (MVAT Act), 2002, supported by Maharashtra Value Added Tax Rules (MVAT Rules). VAT is levied on sale of goods including intangible goods.

Applicalibilty of VAT

Goods Rate Items Covered

Schedule A Nil Tax free Goods

Schedule B 1% Gold , Silver, Precious Metals & Stones

Schedule C 4% Goods used for Industrial Input

Schedule D 20% Foreign Liquor, Indian Liquor,

Molasses, High Speed Diesel Oil

Schedule E 12.5% Remaining

Schedule C the VAT is 5% applicable in the current situation.

Definitions

Goods

“Goods” means every kind of moveable property

Does not include: Newspapers, actionable claims, money, stocks, shares, securities or lottery tickets

Includes: Live stocks, growing crop, grass and trees and plants including the produce thereof including property in such goods attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.

Dealer

“Dealer” refers to a person who buys or sells goods within the state for a valuable consideration.

Importer

“Importer” means a dealer who brings any goods into State or to whom any goods are dispatched from any place outside State

Purchase Price

“Purchase Price” means the amount of valuable consideration paid or payable by a person for any purchase made including any sum charged for anything done by the seller in respect of the goods at the time of or before delivery thereof, other than the cost of insurance for transit or of installation, when such cost is separately charged

Sale

“Sale” means a sale of goods made within the State for cash or deferred payment or other valuable consideration but does not include a mortgage, hypothecation, charge or pledge.

Sales Price

“Sale Price” means the amount of valuable consideration paid or payable to a dealer for any sale made including any sum charged for anything done by the seller in respect of the goods at the time of or before delivery thereof, other than the cost of insurance for transit or of installation, when such cost is separately charged.

Payment

VAT needs to be paid on a monthly, Quarterly or half yearly basis.

Due Date for Payment

Monthly/ Quarterly Payment - 21 Days

Half Yearly – 30 Days

In case of late Payment the Penalty is Rs. 5000/-

VAT Applicability

Importer

The annual Sales turnover should be above Rs. 1,00,000

In a year the value of the taxable goods sold or purchased should be more than Rs. 10,000/-

Other

The annual Sales turnover should be above Rs. 5,00,000

In a year the value of the taxable goods sold or purchased should be more than Rs. 10,000/-