APPLICABILITY OF EXCESS VAT COLLECTION REFUND

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 March 2010 Sir,
We are a Sales Tax defferment dealersince 10 years and 3 more years left in AP. Ours is a manufacturing unit of chemical process equipments we are charging 12.50% output tax recently at VAT AUDIT Sales tax personnel on verification have shown an amendment of AP VAT act GO DT;04.11.08 WEF 01.10.08 that chemical process machines falls under 4% and that we collected excess tax from customers therefore that excess tax should be repaid to the Sales tax department. Kindly,clarify whether we should pay or defend our case

K Bala Kishan

K Bala Kishan (Expert)
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23 March 2010 Dear Sir,

Actually as per the GO, the items are amended into Schedule IV which is 4% of tax. Please verify whether the items which were sold are before that GO or after that GO. You have been charging higher rate of tax to the Customers and paying higher rate to the department, then the dept will not ask you to repay the same back to them. If any of the customer insists about the same, then issue them the debit note and close the issue. Otherwise, the customer also will be claiming VAT refund from the department.

Its better for you to take a legal opinion from your concerned local sales tax advocate and get clarification.

Regards,

Querist : Anonymous

Querist : Anonymous (Querist)

23 March 2010 MY POINT IS THAT WE ARE AVAILING SALES TAX DEFFERMENT. SO THE QUESTION IS AS WE HAVE CHARGED MORE TO CUSTOMERS THE SALES TAX PERSONNEL ARE ASKING FOR REFUND OF EXCESS RATE OF TAX COLLECTED AND PAY amount now which otherwise we would have paid after 14 years of completion of Sales tax defferment period.

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K Bala Kishan

K Bala Kishan (Expert)
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23 March 2010 Hello Sir,

Here the point is...Sales Tax Deferment is different and excess tax collected and asking for refund is different. The concepts are different.

Sales Tax Deferment is to be paid on yearly basis till the period of payment ends may be in future date as we have availed the facility earlier in our manufacturing facilities.

The point of charging more to customers and sales tax personnel asking for refund of excess rate of tax collected. It seems, the tax to be remitted to Authorities @ 12.5% which you have charged would have been remitted everymonth along with monthly return. Is int it. Otherwise they will not ask for payment, if you have remitted them the same rate whatever u have charged to customers.

Hope u understand my point.

Please let me know further any queries.