23 October 2011
I filed mahvat return for 6 months of period april to sep 2011 2-3 days back.
Now after going through documents i found out that in month of june for 1 bill of purchase of total 1 lakh 87000(with vat @12.5%) ,i had got a credit note of 1 lakh 35000.Hence the payment for that bill i made was 52000 only.
For return purpose i calculated vat on total purchase 1 lakh 60000.In short I kept the purchase as it is for vat return and showed i paid 20750 as vat with bill in purchase.In sense though i paid 52000 cheque to the party,in purchase i showed as purchase worth 1 lakh 66000 and vat 20750.
I was planning to add that credit note as my profit in my balance sheet in income tax return and thought the credit note have no effect on vat as one have to pay total vat on all product and the benefit you get is profit which is on purchase price is my thinking.
So should i have to file a revised return or i did filed the correct return?
ALso say suppose i dont show that detail even in my income return as profit is there a way the system can find out the same?
I dont come under the audit category as its below 60 lakhs per year.
24 October 2011
Mr Sohil, The method adopted by you is wrong as per vat law. Now you have paid Rs 52,000/ aginst that bill and it is not correct to claim Rs20,750/ as vat paid. You have to reduce the tax paid also as per the rate on the paid amount(it must be mentioned in credit note). As per rules,you have to rectify this error and you can do it now. MJK
25 October 2011
Mr. Sohil, How this value reduction has happened in the purchase bill. Is it due to price reduction(it can not be so much) or return of purchases ?.If there are purchases returns by you you have to reduce so much amount from both the purchase a/c and the respective return.Otherwise there will be an anamoly in your a/c,because there should be sales or consumption for all purchases.Now you may declare Rs52,000/- as corrected purchases and claim Rs6500 only(@12.5%) as input tax credit. MJK
26 October 2011
Mr. Sohil, I think you need not make any changes in the vat returns.Just take it as a bonus given by your supplier. You have paid taxes on your purchases and therefore the claims already made in the returns on the input tax are not wrong.Now,after a long period,your supplier can not change the tax collected in the invoice.The VAT already paid by the suppier to the Govt with respect to the sales made to you can not be claimed back or adjusted. So you also need not bother to make any changes in your returns. MJK
26 October 2011
Thanks sir.SO in future if any enquiry comes what do i say? Also should i take that bonus into consideration as profit in IT return? Or suppose i dont show it i might be in trouble. Ill close the querry as soon as i get the answer for same.
27 October 2011
Mr.Sohil, If any quuery comes from tax authorities regrding input tax,you can show the purchase invoice and close the matter.This is a profit and you must have received a cheque for this discount offer.So you have to account it as a profit.If you have received this bonus in any other form it is upto you to account it not. MJK
27 October 2011
No sir i havent received the cheque.Its just that for a big purchase i made a token payment and the company have no issues with it.
Anyways i am planning to show as profit in IT as that will help improve my Pl statement and help to reduce lot of personal liabilities which i took in past as sundry loan.
Thanks again for the detail help and many happy Diwali and prosperous new year to you sir.
CAclubindia
