Dear ALL,
A Dealer books were audited during FY 2010-2011 for MVAT audit as his turnover was more than one crore.
Now for FY 2011-2012 the turnover is just 25 Lakhs, is MVAT Audit needs to be done or not ?
Please reply
Rajesh Poddar
Rajesh Poddar (Chartered Accountant) (321 Points)
06 November 2012Dear ALL,
A Dealer books were audited during FY 2010-2011 for MVAT audit as his turnover was more than one crore.
Now for FY 2011-2012 the turnover is just 25 Lakhs, is MVAT Audit needs to be done or not ?
Please reply
Rajesh Poddar
Dilip Bandekar
(Service)
(85 Points)
Replied 06 November 2012
As per provisions of Section 61 (1) (a) of MVAT Act 2002, reproduced below
"Every dealer liabile to pay tax shall, if his turover of sales or as the case may be of purchases exceeds Rs.60 lacs in any year get his accounts in respect of such year audited by an accountant within prescribed period from the end of that year......"
As per the reading of the section, if turnover of purchases or sales exceeds the prescribed limit in any year then only Audit is compulsory. Now for e.g. in your case, for 2010-11 your clients Turnover of Sales or Purchases was more than prescribed limit therefore, Audit was compulsory. Now in case of 2011-12, your clients Turnover is less than the limit prescribed for Audit and so it is not mandatory for him to submit the VAT Audit Report in Form 704. The dealer needs to submit the annexures J1 & J2 which were prescribed for the dealers in respect of whom the VAT Audit is not compulsory.
Hope this will resolve your querry.
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