Audit report

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2012 We are generating power and selling to captive consumers. We are exempted from VAT. Kindly clarify whether we have to get audited by an accountant as our turnover exceeds Rs. 1 crore. In the G O Ms. No.119, it has been stated ....... the dealer including zero rate.... and nothing has been mentioned about exempted sales

CA. Subhash Dangi

CA. Subhash Dangi (Expert)
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27 September 2012 VAT under State Act applicable in different States.

As your turnover exceeds the specified limit in your state, then your accounts are required to be compulsorily audited by Accountant.

Different States are fixed different limits for VAT Audit. Please check the latest notification of VAT for the limit.

Gokulesh

Gokulesh (Expert)
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28 January 2013 Whether MVAT Audit is mandatory even if There is 100% sale of exempted goods, (T.O Exceeds Rs60Lakhs) ?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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15 July 2024 Based on the information provided, it appears you are selling power to captive consumers and are exempt from VAT (Value Added Tax). Here are the considerations regarding whether VAT audit is mandatory for your situation in Maharashtra:

### Exemption from VAT

If your sales are exempted from VAT, this typically means you are not required to collect VAT on the sale of goods or services. However, the exemption from VAT does not necessarily exempt you from the requirement to undergo a VAT audit if your turnover exceeds the specified limit.

### VAT Audit Requirement in Maharashtra

1. **Threshold for VAT Audit**: In Maharashtra, the turnover threshold for mandatory VAT audit is Rs. 1 crore. If your turnover from all sales (including exempted sales) exceeds Rs. 1 crore in a financial year, you are required to undergo a VAT audit.

2. **Nature of Sales (Exempted vs. Taxable)**: The requirement for VAT audit depends on your total turnover, which includes all sales whether taxable or exempted. The fact that your sales are exempted from VAT does not automatically exempt you from the audit requirement if your turnover exceeds Rs. 1 crore.

3. **GO Ms. No. 119**: The Government Order (GO Ms. No. 119) might specify provisions related to VAT audits, including exemptions or thresholds. It's essential to review this order to understand the specifics relevant to your business activities.

### Clarification on Exemption and Audit:

- **Exemption from VAT**: Since you are exempt from VAT on your sales to captive consumers, you do not charge VAT on these sales.

- **Audit Requirement**: Despite being exempt from VAT, if your turnover exceeds Rs. 1 crore, you are required to undergo a VAT audit under the Maharashtra Value Added Tax Act.

### Steps to Take:

1. **Verify Turnover**: Calculate your total turnover from all sales, including exempted sales, to determine if it exceeds Rs. 1 crore.

2. **Consult with a Chartered Accountant**: Seek advice from a qualified chartered accountant who is familiar with Maharashtra VAT laws. They can assess your specific situation, review applicable government orders, and advise on compliance requirements.

3. **Prepare for Audit**: If your turnover exceeds Rs. 1 crore, ensure that your financial records are up to date, accurate, and compliant with VAT regulations. Prepare for the VAT audit as required under the law.

By following these steps and seeking professional advice, you can ensure compliance with VAT audit requirements in Maharashtra, even if your sales are exempt from VAT under the current regulations.