COMMENTARY ON DELHI VALUE ADDED TAX

by K K Gupta

 

1.0  INTRODUCTION

           

 

The Delhi Value Added Tax (hereinafter referred to as 'VAT') comes into effect from 1st April 2005, which replaces sales tax structure prevalent in Delhi. The VAT intends to harmonise tax structure of various States and rationalise the overall tax burden. The essence of VAT is that it provides credit/ set-off for input tax, i.e. tax paid on purchases, against the output tax, i.e. tax payable on sales.

 

2.0  DEFINITIONS

           

2.1 Value Added Tax (VAT) -: VAT is a multi-point tax on value addition which is collected at different stages of sale with a provision for set-off for tax paid at the previous stage/tax paid on inputs.

2.2 Sale -: Sale includes:-

a. The conventional sale i.e. Transfer of property in goods;
b. Supply of goods by a society, club, firm, and company to its members;
c. Transfer of property in goods involved in execution of works contract;
d. Delivery of any goods on hire purchase or any other system of payment by instalments;
e. Transfer of right to use any goods, whether or not for a specified period; and
f. Supply of good or other articles by the restaurants, hotels etc., by way of or as a part of service.

2.3 Dealer -:'Dealer' means any person who carries on business in Delhi and includes-

(i)

any person who, for the purposes of or in connection with or incidental to or in the course of his business buys, sells, goods directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration;

(ii)

any department of the Central Government or a State Government, a local authority, Panchayat, Municipality, Development Authority, Cantonment Board and each autonomous or statutory body or an industrial, commercial, banking, insurance or trading undertaking whether or not of the Central Government or any of the State Governments or of a local authority, if it buys, sells, supplies or distributes goods, in the course of specified activities which may be prescribed from time to time;

(iii)

a factor, commission agent, broker, del credere agent, or any other mercantile agent by whatever name called, who carries on the business of buying, selling , supplying or distributing goods on behalf of any principal, whether disclosed or not;

(iv)

an agent of a non-resident (where such non-resident is a dealer under any other sub-clause of this definition);

(v)

a local branch of a firm or company or association of persons, outside Delhi where such firm, company, association of persons is a dealer under any other sub-clause of this definition;

(vi)

a club, association, society, trust, or cooperative society, whether incorporated or unincorporated, which buys goods from or sells goods to its members for price, fee or subscription, whether or not in the course of business;

(vii)

an auctioneer, who sells or auctions goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal;

(viii)

a casual trader; or

(ix)

any person who, for the purposes of or in connection with or incidental to or in the course of his business disposes of any goods as unclaimed or confiscated, or unserviceable or scrap, surplus, old, obsolete or as discarded material or waste products by way of sale;

 

 

 

 

 

3.0 INPUT TAX CREDIT ON OPENING STOCK AS ON 1ST APRIL 2005

 

Input Tax Credit will be available to registered dealer. in respect of Tax paid goods lying in stock at the inception of VAT Act from 1st April 2005.

 

3.1       Opening Stock NOT ELIGIBLE for Input Tax Credit

Ø      Capital Goods

Ø      Finished Goods

Ø      Closing Stock that was purchased without payment of Tax under the Delhi Sales Tax Act e.g. stock taxable at last point.

Ø      Stock purchased from outside Delhi or imported.

Ø      Stock not held in Delhi as on 1st April 2005.

Ø      Stock for which no sales invoice is available in original.

Ø      Stocks purchased from unregistered dealers.

Ø      Stock of first point goods purchased against ST-35/ 35-1 forms.

Ø      Work in Progress

 

3.2       Opening Stock ELIGIBLE for Input Tax Credit

Ø      Trading Stock

Ø      Raw Materials

Ø      Packing materials.

Ø      Consumable Stores

Ø      Goods purchased from Delhi and in transit as on 31st March 2005.

 

3.3    Conditions subject to which Input Tax Credit on Opening Stock will be allowed are:

 

1.      Goods should have been purchased between the period 1st April 2004 to 31st March 2005.

2.      Goods were taxable at first point under the Delhi Sales Tax Act and have already borne tax therein (No credit for Central Sales tax paid on purchases).

3.      Goods are not taxable at last point under the Delhi Sales Tax Act as

      held on 31st March 2005.

4.      Goods are held in Delhi as on 1st April 2005.

5.      The dealer has purchased opening Stock from a registered dealer under Delhi Sales Tax Act.

6.      Goods were purchased with an intention not to transfer either to branch or to the consignee agent.

7.      The dealer has in his possession the original invoices (irrespective of whether the tax paid has been shown separately or not).

 

3.4  In case, the Sales Tax amount is not shown separately on the invoice, then 75% of the Sales Tax amount calculated in the following manner would be allowed as Input Tax Credit.

 

E.g. A dealer purchases goods for Rs. 1,100/- which are liable to sales tax @ 10% and the same has been shown in the invoice as a tax paid sale and no separate sales tax has been disclosed.

 

In this case the Input Tax Credit available on the particular goods would be calculated as under:

Rate of Tax ( r ) = 10%, Tax Fraction = r / (r+100) = 10 / 110

            Therefore tax included in the invoice = Rs.100

As per Rule, only 75% of the above amount i.e. Rs.75 can be claimed as Input Tax   Credit.

 

3.5       Procedure to be followed for availing Input Tax Credit on Opening Stock of Goods as on 1st April 2005

 

  1. Within a period of 4 months of the commencement of DVAT Act, i.e. up to 31st July 2005, all registered dealers willing to claim tax credit shall furnish to the Commissioner, a statement of the opening stock in form DVAT – 18. The statement cannot be revised once furnished. Therefore, this statement should be prepared with due caution.
  2. If tax credit for opening stock is in excess of Rs.1 Lac, a certificate from a Chartered Accountant certifying that net credit claim made is true and correct, will have to be filed.
  3. The dealer shall claim the entire amount of credit to which he is entitled in a single go and the said statement in form DVAT-18 will have to be furnished with the return to be furnished under the DVAT Act.

 

For accounting entry to be passed for recording the opening Input Tax Credit, Refer Annexure I, Pt. A.

 

4.1 PURCHASES/ RECEIPTS - INPUTS

         

a)      Local Purchases

VAT credit is available in respect of all purchases made and taxes paid thereon within the state. All goods, except liquor, lottery ticket, petrol, diesel, aviation turbine fuel and other motor spirits, are covered under VAT and get the benefit of VAT credit.

 

The dealer may purchase some common inputs which are to be used for manufacture of goods which are liable to VAT as well as for the manufacture of exempted goods. In such a case, the inputs to the extent used for manufacture of goods liable to VAT are eligible for VAT credit and no VAT credit is available in respect of inputs used for the manufacture of exempted goods. As in the case of a dealer, on the date of purchase, it is not possible to determine separately the inputs to be used for the manufacture of exempted goods and for goods liable to VAT, the dealer will claim the VAT credit on all the inputs purchased. Subsequently, when the inputs are actually used for manufacture of exempted goods, the dealer should pass an appropriate reversal entry for the VAT credit availed earlier on inputs used for manufacture of exempted goods. The VAT credit reversed in this manner should be added to the cost of exempted goods.

 

For Accounting Entries made for purchase under existing system and accounting entries required to be made under VAT system refer Annexure I, Pt. B.

 

b)    Central Purchases

No credit under the VAT laws is allowable in respect of taxes paid on purchases made from other states. Accordingly, no modifications are required in recording accounting entries for purchases made in the course of Inter state trade & commerce.

 

c)    Imported Purchases

No modifications are required in recording accounting entries for Imports.

 

d)   Inputs Transferred from other manufacturing unit.

No credit under the VAT laws is allowable in respect of taxes paid on inputs transferred from other manufacturing units of the dealer located outside Delhi. Accordingly, no modifications are required in recording accounting entries for such transfers.

 

However, VAT credit is available in respect of all inputs, on which taxes are paid in Delhi and are transferred from other manufacturing units located within Delhi. No modification required in the existing system.

 

e)     Inputs transferred to other Manufacturing unit.

Dealer is liable to reverse input tax credit claimed earlier to the extent of 4% only on inputs at the time of transferring the same to other manufacturing unit outside the state. However, dealer is not required to reverse the same if the input is transferred to other manufacturing unit within the state.

 

However, at the time of receiving back the finished goods manufactured out of raw material earlier sent from Delhi, on which Input tax credit has been reversed, then dealer can restore input tax credit reversed earlier to the extent of raw material earlier sent from Delhi is used in such finished goods. For accounting entry refer Annexure I, Pt. C.

f)     Input transferred to Loan Licensee/ Job Worker/ Contract Manufacturer.

Dealer is liable to reverse input tax credit claimed earlier on inputs at the time of transferring the same to Loan Licensee/ Job Worker/ Contract Manufacturer to the extent of 4% only. However, the dealer can claim back the Input tax already reversed earlier to the extent of such Input utilised in manufacture of finished goods received in the state from Loan Licensee/ Job Worker/ Contract Manufacturer. For accounting entry refer Annexure I, Pt. D.

           

g)      Taxable Input Lost or destroyed

Dealer is liable to reverse Input tax credit claimed earlier on input lost or destroyed. 

 

h)      Debit / Credit Notes

Dealer is eligible to claim VAT credit for additional input tax paid on debit notes raised by suppliers. Refer Annexure I, Pt. B for accounting entry. Similarly, Dealer is liable to reverse VAT credit to the extent of input tax reversed on credit note raised by supplier. Accounting entry for Credit Note will be the reversal of entries mentioned Annexure I, Pt. B for accounting entry.

 

4.2 MANDATORY FIELDS REQUIRED IN PURCHASE INVOICE TO CLAIM TAX CREDIT.

 

 

In the VAT regime the tax credit can be claimed only on strength of Purchase Invoice, therefore, it is pertinent to ensure that Purchase Invoice is proper and contain complete information. At the time of receiving Purchase Invoice from Local Suppliers, it should be ensured that the following mandatory fields required to claim Input Tax Credit are duly filled in.

  1. The words ‘Tax Invoice’ are printed at a prominent place.
  2. The name, address and TIN of the selling registered dealer.
  3. The name and address of the dealer and its TIN.
  4. Printed Serial Number should be there along with the date on which the tax invoice is issued.
  5. Description, quantity, volume and value of goods sold and services provided and the amount of VAT charged thereon indicated separately.
  6. The signature of the selling dealer or his servant, manager or agent, duly authorized by him.
  7. The name and address of the printer and the first and last serial number of the tax invoices printed and supplied by him to a dealer. This requirement may be dispensed with in case of computer generated invoices.

 

5.0 SALES/ STOCK TRANSFER - FINISHED GOODS

 

5.1    Present system of recording Sales/ Stock Transfer needs no modification.

5.2    Under DVAT Act, Sales made to UNO and its wings or foreign mission or embassies, be it local or Inter-state sale, are taxable and not tax free. However, such bodies can claim refund of tax paid on their purchases from the government as per section 41. List of such bodies has been given in Sixth Schedule appended to DVAT Act.

 

Ø      Goods lost or destroyed

Dealer is liable to reverse Input tax credit claimed earlier on taxable inputs used for production of Goods lost or destroyed.

 

6.0 MODIFICATIONS REQUIRED IN EXISTING FORMAT OF INVOICING FOR BOTH LOCAL AND CENTRAL SALES

 

Under VAT System, ‘Tax Invoice’ is to be issued only when a sale is made to registered VAT dealer of the state. In all other cases like Local sales made to persons other than registered VAT dealers, Inter State Sale, Export Sale, Stock Transfer or the consignment Sale, a ‘Retail Invoice” is to be issued.

 

At present a single format of Invoice is being used for making sales both to the registered dealer and to the final customers. Under the new system separate invoices need to be issued for Sales to registered dealers and to others.

 

6.1       Accordingly, for Sales to registered Dealers following modifications need to be made in Invoices -:

1.      The words ‘TAX INVOICE’ should be printed on the Invoice at a prominent place to allow the purchaser to take credit of Sales tax already paid.

2.      The Registration number of the purchaser should be mentioned with the name and address.

3.      A declaration on the invoice saying that, “Certified that this being a computer generated Invoice, pre-printed serial number and name of printing press are not required”.

 

6.2    For Sales made to End consumers, Unregistered dealers, Inter State Sale, Stock Transfer or Consignment Sale, following modifications need to be made in Invoices -:

1.            The words ‘RETAIL INVOICE’ or ‘CASH MEMORANDUM’ or ‘BILL’ should be printed on the Invoice at a prominent place.

2.            In case the sale is in the course of Inter-state trade or commerce, the name, the registration number and address of the purchasing dealer and the type of statutory form, if any, against which the sale has been made.

 

For model format of Invoice refer Annexure II.

 

7.0 DEBIT NOTES/ CREDIT NOTES

 

 

7.1       The Present system of preparing Debit Notes / Credit notes needs modification. Fields additionally required to be filled in are as follows:

1.      Registration number of the purchaser if he is a registered dealer along with name and address.

2.      A description of the reason for issuing the Credit Note or Debit Note.

3.      The amount of variation of the tax amount shown on the tax Invoice, positive or negative.

 

 

 

7.2     Time limit for claiming credit of tax, due to debit notes or goods returned:

 

There is no modification in existing system under Central Sales Tax Act and the existing limit will be applicable. But for debit note/ Sales Return against Local Sale on which VAT has been charged there is no time limit fixed for claiming the tax credit. Tax credit on such returns can be claimed during the period in which said debit note is received.

 

 

8.0 TREATMENT OF OUTPUT TAX ON BAD DEBTS

 

Dealer is eligible to claim credit of output tax charged on sale which are subsequently written off due to non-recovery as bad debts.

 

9.0 CLOSING STOCK -VALUATION

 

 

9.1       Inventory Valuation: Raw Material

With a view to recommend appropriate accounting treatment for VAT credit, it would be useful to note the requirements of paragraphs 6 and 7 of Accounting Standard (AS) 2, ‘Valuation of Inventories’, issued by the Institute of Chartered Accountants of India, dealing with ‘cost of inventories’ and ‘cost of purchase’, which are as below:

 

“6.        The cost of inventories should comprise all costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.”

“7.        The costs of purchase consist of the purchase price including duties and taxes (other than those subsequently recoverable by the enterprise from the taxing authorities), freight inwards and other expenditure directly attributable to the acquisition. Trade discounts, rebates, duty drawbacks and other similar items are deducted in determining the costs of purchase.” 

 

Particular attention is invited to the paragraph related to ‘costs of purchase’, according to which, only those taxes have to be included as costs of purchase which are not subsequently recoverable by the enterprise from the taxing authorities.  Since the tax paid on inputs is available for set-off against the tax payable on sales, it is considered of the nature of taxes recoverable from taxing authorities.  Accordingly, VAT credit should be reduced from the cost of purchases.

 

Keeping in view the aforesaid Accounting Standard following methods will be followed for valuing Inventories.

 

Method I

If entire Input is utilized for production of taxable finished goods and the dealer is able to substantiate the same by maintaining proper records.

 

Inventory will be valued net of Input Tax Credit. Un-utilized Input Tax Credit will be shown on the Asset Side of the Balance Sheet under the head Advances.

 

Method II

If Input is utilized for production of taxable and exempted finished goods and such finished goods are also transferred to branches as stock transfer all over India.

 

In such a case, the inputs to the extent used for manufacture of goods liable to VAT are eligible for VAT credit and no VAT credit is available in respect of inputs used for the manufacture of exempted goods and Stock Transfer. If, on the date of purchase, it is not possible to determine separately the inputs to be used for the manufacture of exempted goods and for goods liable to VAT, the enterprise may recognize VAT credit on all the inputs purchased.  Subsequently, when the inputs are actually used for the manufacture of exempted goods, the enterprise should pass an appropriate reversal entry for the VAT credit availed earlier on inputs used for manufacture of exempted goods.  The VAT credit reversed in this manner should be added to the cost of exempted goods.  Similarly, in the case of stock transfer/consignment sale of goods out of the State where VAT credit is available only to the extent of a certain portion of input tax paid, the enterprise may recognize full VAT credit at the time of purchase.  Subsequently, when the actual stock transfer/consignment sale takes place, the enterprise should pass the appropriate reversal entry for that portion of input tax, which is not eligible as VAT credit.

 

Inventory will be valued at net of Input Tax Credit. Further, proportionate Input Tax Credit, to the extent on stock of input held, not available due to utilization of input in the production of exempted products or stock transfer to branches will be added to the value of Inventory.

 

9.2       Inventory Valuation: Finished Goods

Finished Goods will be valued taking into account cost of inputs consumed calculated as discussed above together with manufacturing expenses.

 

Eg-: 1,000 Kg of Item A (Raw material) is purchased for Rs. 100,000/- on which VAT paid is Rs.10,000/-. Sale of Finished Goods Tablet 'A' is produced out of 800 Kg of said raw material is as below-:

 

Type of Sale                  Quantity Sold (Nos.)     Tax Charged (Rs.)

 

Export Sale                             20,000                         Nil

Local Sale                               25,000                         1,000

Stock Transfer                                    25,000                         Nil      

Exempted Sales                            35,000                        Nil

       Inter State Sale                            15,000                         600

    Total                                             120,000                      1,600

 

Note-: Out of stock transfer to Branch 5000 Tablets are still in Stock.

 

a) Input Tax Credit Disallowed will be calculated as follows-:

= 8,000 X (25,000 + 35,000)

             120,000         

=Rs.4,000/-

 

b)   Inventory of remaining 200 Kg of Raw Material will be valued as follows:

    Raw Material Cost (Net of Input Tax) = Rs.20,000/-

 

c)      Inventory Value of 5000 tablets will be

Cost of Raw material ( Net of Input Tax) Rs. 80000 * 5000/120000 = Rs. 3,333/-.

Add: Proportionate VAT disallowed Rs.4,000 * 5000/60000 = Rs. 333/-

Value of Tablet = Rs.3,666/-

 

10.0 VAT CREDIT FOR CAPITAL GOODS

 

 

      ACCOUNTING TREATMENT FOR VAT CREDIT IN CASE OF CAPITAL GOODS

Paragraph 9.1 of Accounting Standard (AS) 10, Accounting for Fixed Assets, issued by the Institute of Chartered Accountants of India, inter-alia, provides as below:

“9.1      The cost of an item of fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. …”

 

 

VAT credit is considered to be of the nature of a refundable tax. Therefore, this credit should be reduced from the purchase cost of capital goods concerned.

 

If capital goods is used for production of taxable and exempted finished goods and such finished goods are also transferred to branches as stock transfer all over India, then proportionate Input Tax will be disallowed to the extent such capital goods are utilized for the production of exempted goods and finished goods transferred to other branches outside the state. In such cases, the disallowed portion of Input Tax will be added to the cost of the asset.

 

11.0 TAX PAYMENT

 

11.1     Payment of tax due is to be made after taking credit for Input tax paid on local purchases made during the month which will be calculated as per following formula-:

A)    Output Tax = (Local Sales Tax + Central Sales Tax) collected

B)    Input Tax Credit =

Input Tax Credit on Entire Input Purchased locally during the month - Input tax credit reversed due to utilization of Input in Stock Transfer and Exempted sale. Where

Tax credit reversed on utilization of Input in Stock Transfer will be calculated as follows:

4% of value of taxable inputs utilized in production of goods under Stock Transfer to other state.

Tax Credit reversed on utilization of Input in Exempted Sale will be calculated as follows:-

Value of taxable Inputs utilized in production of exempted goods sold * Input tax rate. 

C)    Tax Payment = A-B

For Accounting entries refer, Refer Annexure I, Pt. F.

 

12.0 TAX RETURNS

 

12.1     A monthly Return is to be filed in Form – DVAT-16 within 28 days from the end of every month, along with the proof of payment of the amount due, in Form DVAT-20. Return is to be filed even if dealer has no refund to claim or tax to pay.

 

12.2     CST Return has been harmonized with that of DVAT returns. The monthly reporting of CST will continue to be done on the CST returns. CST amounts and turnovers will also be reported on DVAT returns for information purposes and to allow the offsetting of CST liability by any excess DVAT credit. Return under Central Act in Form-1 will have to be filed.

 

12.3     Revised Return: Where after submission of the Original Return, some errors are detected, the adjustment on account of such errors will be made in return relating to period during which such error is detected.

 

13.0 MANDATORY RECORDS

 

13.1     The dealer is required to maintained following mandatory records/ MIS Reports through ERP at it's principal place of business under VAT law:

 

a)      Purchase record in Form DVAT-30, showing details of purchases on which Tax has been paid, purchase made without payment of tax, purchases from exempted unit and purchase made from outside the state. Original tax invoice for purchases on which tax has been paid and invoices for purchases made without payment of tax shall be preserved date wise and in numerical order;

 

b)      Sales record in Form DVAT-31, showing separately sales made at different tax rates, zero-rated taxable sales and tax-free sales. Copies of tax invoices related to taxable sales and invoices related to exempt sales shall be retained date wise and in numerical order;

 

c)      Record of inter-state sales and inter-state stock transfer or transfer to job worker / loan licensee/ contract manufacturer supported by statutory declaration and such other evidences as may be relevant;

 

d)      A monthly account specifying total output tax, total input tax and net tax payable or excess tax credit due for carry forward;

 

e)      Details of input tax calculation;

 

f)        Stock record showing stock receipt and deliveries and manufacturing records;

 

g)      Stock record showing separately the particulars of goods stored in cold storage, warehouse, godown or any other place taken on rent;

 

h)      Annual accounts including trading profit & loss account and the balance sheet;

 

i)        Bank records including statement, cheque book counter foils and pay-in slips;

 

j)        Cash book, day book and ledger;

 

k)      Copy of all challans in Form DVAT-20, evidencing payment of tax ,interest or any other amount due;

 

13.2    Records to be carried by Goods Vehicle

The owner, driver or person in charge of goods vehicle shall carry the Transport Receipt in Form DVAT-32, Sale Invoice or Delivery Note in Form DVAT-33 as the case may be.

 

13.3    Retention Period

The dealer is required to preserve the above mentioned records for atleast SEVEN Years.

 

14.0 REFUNDS

 

14.1     When Input Tax Credit exceeds Output Tax, CST and any applicable interest, penalties and other amounts due, dealer is entitled to a refund.

 

14.2     Excess Input Tax Credit, if there is any, either may be claimed as refund or may be carried forward to the next tax period as Tax Credit.

 

14.3     Procedure for making Refund claim.

·        Return filed in Form DVAT-16 is also the claim for refund.

A claim for refund of any other reasons may be made in Form DVAT - 21 giving the grounds on which claim is made.

 

 

 

Annexure - I

 ACCOUNTING

 

 

For DVAT purposes, the dealer must record its turnover of purchases and sales in the accounts maintained by it. These accounts should:

·        Be regularly and systematically prepared and maintained;

·        Give a true and fair view of its dealings; and

·        Be used by the dealer for determining its turnover of the business for commercial or income tax purposes.

 

The accounts will normally be prepared on the accrual basis i.e. the dealer must account for DVAT in the period in which the consideration for the sale/ purchase is receivable/ payable (and not as money is received or paid). In accrual system sales are accounted for when the invoice is issued.

 

Accounting Entries:

A) For Input Tax Credit on opening Stock

As on 31st March 2005, the Accounting Entry to be passed for recording the Input Tax Credit is -:

            Input Tax Credit A/c                 Dr.

            Opening Stock A/c                   Cr.

 

 

B) For Purchases

 

Nature of Transaction

Entry in Existing System

Entry under VAT System

Purchase of Capital Goods

Stock–Machinery A/c               Dr.

Excise R.G. 23A Part II            Dr.

Creditors A/c                           Cr.

Excise R.G. 23A Part II            Dr.

Stock–Machinery A/c               Dr.

Input Tax Credit A/c                 Dr.

Creditors A/c                           Cr.

Packing Material Purchase

Packing Material                       Dr.

Excise R.G. 23A Part II            Dr.

Creditors A/c                           Cr.

Excise R.G. 23A Part II            Dr.

Packing Material                       Dr.

Input Tax Credit A/c                 Dr.      

Creditors A/c                           Cr.

Dies & Punches

Stock–Die & Punch                  Dr.

Excise R.G. 23A Part II            Dr.

Creditors A/c                           Cr.

Excise R.G. 23A Part II          Dr.

Stock – Die and Punch            Dr.

Input Tax Credit A/c               Dr.

Creditors A/c                          Cr.

Consumables Purchase

Stock-Consumable Stores        Dr.

Excise R.G. 23A Part II            Dr.

Creditors A/c                          Cr.

 

Excise R.G. 23A Part II            Dr.

Stock- Consumable Stores       Dr.

Input Tax Credit A/c               Dr.

Creditors A/c                          Cr.

Raw Material Purchase

Excise R.G. 23A Part II            Dr.

Raw Material                            Dr.

Creditors A/c                           Cr.

Creditors A/c                           Cr.

Excise R.G. 23A Part II            Dr.

Raw Material                            Dr.

Input Tax Credit A/c                 Dr.

 

 

C)        i)       For Input transferred to other manufacturing unit outside the state:

Stock in Transit A/c                  Dr.

Raw Material A/c                     Cr.

Input Tax Credit A/c                 Cr.

Excise R.G. 23A Part II            Cr.

ii)                  For Finished Goods received from manufacturing unit outside Delhi produced from taxable input transferred from Delhi:

Input Tax Credit A/c                 Dr.

Finished Goods A/c                  Dr.

Stock in transit A/c                   Cr.

 

D) For Transfer of Raw Material to Loan Licensee

Nature of Transaction

Entry in Existing System

Entry under VAT System

 

 

 

Raw Material Stock Transfer

Cenvat in Transit A/c      Dr.

Stock in Transit A/c        Dr.

Excise R.G.23A Part II   Cr.

Material Issue A/c           Cr.

 

Cenvat in Transit A/c      Dr.

Stock in Transit A/c        Dr.

Excise R.G.23A Part II   Cr.

Material Issue A/c           Cr.

Input Tax Credit A/c       Cr.

 

 

E)     For Bad Debts

Nature of Transaction

Entry in Existing System

Entry under VAT System

 

 

 

Bad Debts written off

Bad Debts A/c                 Dr.

Sundry Debtors A/c        Cr.

Bad Debts A/c                      Dr.

Output Tax A/c                    Dr.

Sundry Debtors A/c             Cr.

 

 

F)         For Tax Payment

1)         Entry for Input Tax Credit available for adjustment from Output Tax

            Local Sales Tax Payable A/c                            Dr.

            Central Sales Tax Payable A/c              Dr.

            Input Tax Credit A/c                                         Cr.

The Input Tax credit available will be first adjusted towards Local Sales Tax payable and the balance available, if any, will be adjusted towards Central Sales tax Payable.

2)                  Entry for Input Tax Credit not available

Purchase A/c                                                    Dr.

Input Tax Credit A/c                                         Cr.

 

 

 

 

 

Annexure II

 

TAX INVOICE

 

M/S.  …. ( Name & Address of the selling dealer ) ………………

Tax Identification Number ( TIN ) ……………………………….

Book No.  ( Pre-printed )

Serial No. ( Pre-printed )

Date ___/__/____

To   … ( Name and address of the purchasing dealer )

Purchaser’s

Tax Identification Number TIN ( in any)

Sl. No.

Description of Goods

Quantity

Unit price or Rate

Total Amount

 

 

 

 

 

 

 

 

 

 

 

Total Sale value before adding VAT

 

+ VAT @ …… %

 

Total Sale Price with VAT

 

 

                                                                                                      Signature

Name and address                                                      ( of Selling Dealer / manager / agent )

Of the Printer                                                           Invoice Printed ( first and last serial 

                                                                                 number of tax invoice printed )

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RETAIL INVOICE ( CASH MEMO / BILL )

 

M/S.  …. ( Name & Address of the selling dealer ) ………………

Tax Identification Number ( TIN ) ……………………………….

Book No.  ( preprinted )

Serial No. ( Pre printed )

Date ___/__/____

To   … ( Name and address of the purchasing dealer in available in case of local sale but compulsorily in case of central sale )

Purchaser’s : RC No/ TIN ( if any )

Note : See below

 

Sl. No.

Description of Goods

Quantity

Unit price or Rate

Total Amount

 

 

 

 

 

 

 

 

 

 

 

Total Sale value inclusive of VAT

 

Sale / Transfer against central form ( in any ) C/F/H etc

 

 

                                                                                                      Signature

                                                                               ( of Selling Dealer / manager / agent )

 

           

 

Note : In case of central sale, the registration no./ TIN needs to be compulsorily written. Also mention type of central statutory declaration form against which sale is made, like C or H form etc.