GUJARAT VALUE ADDED TAX ACT, 2003
Gujarat Value Added Tax, 2003 (GVAT Act) is made effective
in the State of Gujarat from 1st April, 2006. On its implementation, following
Acts have been repealed.
• The Gujarat Sales Tax Act, 1969, (GST Act)
• The Bombay Sales of Motor Spirit Taxation Act, 1958.
• The Purchase Tax on Sugarcane Act, 1989.
However, provisions relating to pending assessment,
appeals, recovery, etc., under the above Acts will survive.
The basic requirement of charging tax under GVAT Act is
that where any sale/ purchase of taxable goods in the course of business is
affected, in the State of Gujarat, VAT is payable under GVAT Act. Transactions
made in the course of business only are covered under the GVAT Act.
II. Important Definitions
A few important definitions are given hereinbelow.
1) Business — Sec. 2(4)
The term "Business" as defined in Section 2(4)
means any commercial activity in the nature of purchase, sale or supply, with
or without intention to make profit and whether or not profit accrues there
from. Further, any transaction of buying, selling or supplying plant,
machinery, consumable stores, waste products, or such other goods or waste or
scrap of any of them which is ancillary or incidental to or resulting from
such commercial activity are also covered.
2) Capital Goods — Sec.2(5)
Capital Goods : means plant and machinery (other
than second hand plant and machinery) meant for use in manufacture of taxable
goods and accounted as capital assets in the books of accounts;
3) Dealer — S. 2(10)
Dealer means any person who for the purpose of, or
consequential to his engagements in or, in connection to or in the course of
his business buys, sells, manufactures, makes, supplies or distributes goods,
directly or indirectly, or otherwise, whether for cash or deferred payment, or
for commission, remuneration or otherwise and includes.
1. Central Govt., State Govt., Local Authority, Panchayat,
a Statutory Authority, a Company, a Partnership Firm, a HUF
2. A Casual dealer who undertakes occasional transaction of
a business in any exhibition-cum-sale or auction
3. An auctioneer who sells or auctions goods belonging to
4. a factor, broker or commission agent, del credere agent
or any mercantile agent, who carries on business on behalf of his principal
5. A works contractor
6. Seller of goods on Hire purchase or on installment
7. Any person who transfers only right to use any goods
8. Supply of food or drink for human consumption
selling his own agricultural produce
religious or educational institutions carrying on the activity of buying,
selling of goods in performance of its functions for achieving its avowed
objects which are not in the nature of business
selling seafood caught by him or his family
As compared to the GST Act, the scope of dealer
is expanded and even the remotest transaction in the nature of business or
otherwise is sufficient to construe a person as dealer.
4) Raw material — S. 2(19)
It includes processing materials, consumable
stores and material used in the packing of the goods so manufactured but does
not include fuels for the purpose of generation of electricity.
5) Sale — Sec. 2(23)
Sale means sale of goods within the State of
Gujarat for cash or deferred payment or other valuable consideration and
transfer, otherwise than in pursuance of contract, of property in goods
transfer of property in goods, involved in execution of Works Contract
delivery of goods on hire purchase or any system of payment by installments
transfer of right to use any goods for any purpose
supply of goods by any unincorporated association or body of persons to a
supply of goods by a society or club or association to its members on
payment of a price or of fees or subscription or any consideration
supply of goods by way of or as part of any service or in any other manner
supply of goods being food or any other article for human consumption
supply by way of barter of goods
Disposal of any goods including any unclaimed, confiscated, unserviceable,
scrap, surplus, old, obsolete, discarded, waste or surplus product or goods
but it does not include mortgage, hypothecation, charge or pledge.
It is worth noting that, unlike under predecessor GST Act,
there is no separate definition of Specified Sale (for Lease Rent) is given in
GVAT Act. Therefore, rental incomes of all the goods are taxable under GVAT
Act, as against rental income of only specified commodities being taxable
under the GST Act.
6) Sale Price — Sec. 2(24)
It is inclusive inter alia of duties under
Excise/ Customs Act & also of any such sum, charged for anything done at the
time of or before delivery of the goods
7) Taxable Turnover — S. 2(30)
Taxable Turnover means The Turnover of all sales or purchases of a dealer
after deducting.The Turnover of sales not subject to tax under this Act.
Turnover of Goods Exempt u/s. 5(1) or 5(2), &
case of Works Contact, labour, service & other like charges subject to
prescribed conditions. If these charges are not ascertainable, such charges
to be calculated in the manner to be prescribed
8) Total Turnover — S. 2(34)
Total turnover means aggregate of the following
transactions effected by the dealer:
i. Turnover of sales or purchase of goods
within the State whether such sales or purchases of goods are taxable or
exempt under this Act;
ii. Turnover of sales of goods in the course of
inter-State trade or commerce;
iii. Turnover of sales of goods in the course
of export of goods out of the territory of India;
iv. Turnover of sales by a dealer on his
account and also, on behalf of his principal.
III. INCIDENCE AND LEVY OF TAX
U/s. 3, a dealer, crossing threshold limits of
total turnover of Rs. 5,00,000 and taxable turnover of Rs. 10,000 in previous
year, or current year, is liable to pay tax, except for casual dealer, whose
threshold limit is taxable turnover exceeding Rs. 10,000/-.
Further, the dealer incurring liability to pay
tax in previous year or in current year under the CST Act, i.e. having
effected inter-state sales of taxable goods is also liable to pay tax under
GVAT. Besides, dealers, who are already registered under GST Act, Bombay Motor
Spirit Taxation Act, Purchase Tax on Sugarcane Act or CST Act as on appointed
day (i.e., 1-4-2006), are deemed to be registered dealer under S. 23 of the
GVAT Act and are liable to pay tax from the appointed day. No dealer who has
become liable to pay tax u/s. 3 can do business without having valid
IV. SCHEME OF TAXATION UNDER THE GVAT ACT IN BRIEF
Taxes payable under GVAT Act, 2003.
1. VAT U/S. 7(1)
Section 7(1) is a charging section under which
tax is levied on sale of goods, listed in Schedule II and Schedule III.
2. PURCHASE TAX U/S. 9
Section 9 is another charging section wherein,
purchase tax is payable in the following situations.
provides for levy of purchase tax at the rates set out against each of such
goods in Schedule II or III of the Act, when these goods are purchased from
unregistered person, by a registered dealer, liable to pay tax.
provides for levy of purchase tax, where a registered dealer, purchases
sugarcane from an unregistered person for use in manufacture of sugar or
provides for levy of purchase tax where any dealer has purchased any taxable
goods against a certificate or declaration under any provisions of this Act
or earlier law, rules or notification, and the conditions, recitals or
undertakings of such certificate or declaration are not complied with, then
such person or dealer shall be liable to pay purchase tax on the turnover of
such purchases at the rate set out against each of such goods in Schedule II
or III or at applicable rate of tax under the earlier law, as the case may
provides for levy of purchase tax, where a dealer or a commission agent, who
is liable to pay tax under this Act, purchases taxable goods from a
commission agent, to whom permission to pay lump sum tax is granted u/s. 14B
and the goods so purchased by him are not resold within the State, then such
dealer or the commission agent shall be liable to pay purchase tax on the
turnover of such purchases at the rate set out against each of such goods in
(5), inserted w.e.f. 1-4-2008, imposes P.T. on purchase of taxable goods,
sales of which is zero rated u/s. 5A, if the goods so purchased are used for
prohibited purposes like branch/consignment transfer, fuel for motor
vehicle/generation of electricity, etc.
3. ADDITIONAL TAX SEC. 7(1A) & 9(6)
1) W.e.f. 01/04/2008, Additional tax is levied
u/s. 7(1A) on the turnover of sales of goods except the following:
Schedule I – Tax Free Goods
Schedule III – Petrol, Diesel ATF, Motor Spirit, etc.
Schedule II Entry 13 – Bullion & Species, gold, silver & other precious
metals, precious stones & pearls and Articles/Jewellery of gold/ silver or
both or other precious metals.
Taxable Declared Goods However, w.e.f. 11-4-2011, additional tax is payable
@ 1% on these goods also.
2) As per Section 9(6), Additional Tax is also
leviable on turnover of purchases liable to P.T. u/s. 9 except aforementioned
3) The rate of Additional Tax is 1% in case of
goods which are liable to tax @ 4% and is 2.5% in case of other goods, which
are liable to tax @ 12.5 % or more. The Additional Tax is Vattable and is
leviable on sales price excluding VAT. The Additional Tax is not payable on
the tax payable under the lump sum Scheme.
V. RATE OF TAX UNDER THE GVAT ACT, 2003
governed by Section 5(1), contains 54 entries, which are exempt from the levy
of tax. In Schedule II, First 86 Entries are taxable @ 4% except for the
commodities enlisted hereunder which are taxable at specified rates:
Entry (13) Gold/Silver, etc. @1%, Entry (25) Liquors @ 60%. Entry (46B)
Kerosene other than sold under PDS @ 25%, Entry (48A) Lignite @ 20%, Entry
(49A) Low Sulphur Heavy Stock (LSHS) @ 15%, Entry (49B) Lubricants @ 15%,
Entry (51A) Naphtha @ 16%, & w.e.f. 01-04-2011, Entry 76A Tobacco of all types
& Tobacco Products such as Bidi, Cigarette, Gutkha, Pan Masala, Snuff
containing Tobacco @ 22.5%.
87th Entry in
schedule II is Residuary Entry taxable @ 12.5% (Means those commodities which
are not found either in Schedule I or Schedule III or in Entries 1 to 86 in
gives specific tax rates for Motor Spirit goods viz, Entry 1 High Speed
Diesel Oil @ 24% (Rate reduced to 21% by notification Dt.10-06-2008), Entry 2
Aviation Gasoline (Duty Paid) @ 13%, Entry 3 Aviation Gasoline (Bonded) @ 26%,
Entry 4 Aviation Turbine Fuel (Duty Paid) @ 30%, Entry 5 Aviation Turbine Fuel
(Bonded) @ 38%, Entry 6 Any other type of motor spirit excluding natural gas &
LPG @ 26% (Rate reduced to 23% by notification Dt.10-06-2008).
The above entries
are to be read with various notifications issued by the State Government u/s.
5(2), conferring exemption or reduction in the tax rate.
provides that where any goods are sold and such goods are packed in any
material, then the tax on such sale of packing material shall be at the same
rate of tax, if any, at which tax is payable on the goods so packed,
whether the packing material is charged separately or not.
VI. ADJUSTMENTS IN TAX
Section 8 allows adjustments in tax. For determination of
Taxable Turnover, following adjustments are provided.
Rule 43(2)(a) -
– within One Year from date of
Rule 43(2)(b) -
– within 6 Months from date of
Rule 43(3)(c) -
– within 3 Months from end of
Sec. 8(1)(a) -
– No Time Limit
The adjustment is to be made in the tax period of
occurrence of event only. Debit/ Credit Notes shall have to be in accordance
with provisions of Sec. 8, Sec. 61, & Rule 43. Debit/ Credits notes can’t be
issued more than once for the amount charged in excess.
VII. INPUT TAX CREDIT (ITC) Sec. 11
Input Tax Credit is at the core of the scheme of
taxation under GVAT Act. Input tax credit is available on the inputs of a
dealer in full immediately on receipt of tax invoice. The ITC is
available of VAT & Additional Tax paid on purchases, purchase tax & additional
tax u/s. 9 and Entry Tax. In case of manufacturers, it is the tax paid on
purchase of raw material for manufacturing taxable goods. The term raw
material includes processing materials, consumable stores and packing material
but does not include fuels for the purpose of generation of electricity.
2. CONDITIONS FOR ITC
For getting ITC, the prime condition is that the
goods purchased should be intended for sale within the state or, outside state
or, in the course of Inter State trade or commerce or, in the course of export
or, for sale to EOU or, to a Unit located in SEZ or, for Branch Transfer or,
for sale on consignment basis or, for use as raw material for manufacturing
taxable goods or for packing of such manufactured finished goods.
3. ITC ON CAPITAL GOODS
ITC on Capital Goods is also available. Capital
Goods mean plant and machinery purchased after 1-4-2006 and which are not
Further, it should not be used for manufacture of
Tax free Goods (Other than zero rated sales) or for Electrical Power
Generation including Captive Use. Further, the capital good on which ITC has
been claimed should be used for a continuous period of 5 years, or else
proportionate reduction in ITC is required to be made. Besides, ITC is not
admissible on capital goods used in the execution of works contract.
4. ITC ON FUEL AND BRANCH/CONSIGNMENT TRANSFER
ITC of fuel used in motor vehicles or in
generation of electrical energy is not admissible, ITC of other Fuel, if used
in manufacture, is available after deduction of 4% of tax paid on purchase of
such fuel. Similarly, ITC on goods dispatched by way of branch consignment
transfer outside the Gujarat State or of raw materials used in the manufacture
of goods which are dispatched by way of branch/consignment transfer outside
the Gujarat State is eligible after deducting 4% or applicable lower rate of
tax on taxable turnover of their purchases within the State.
5. ITC OF PURCHASE TAX AND ENTRY TAX
ITC of Purchase Tax u/ss. 9(1), 9(5), &
additional tax u/s 9(6) is available in the month of liability shown. ITC of
Purchase Tax u/s. 9(2) is available in the tax period in which actual payment
of tax is made. Similarly ITC of Tax paid under the Gujarat Tax on Entry of
Specified Goods into the Local Areas Act, 2001 is available in the month of
6. ZERO RATED SALES
The concept of zero rated sales has been
introduced w.e.f. 01/04/2008, for allowing ITC on the purchases of goods which
are sold to the Developer or Co-Developer of SEZ or to a Unit carrying on
business in the Processing or Demarcated area of SEZ. This benefit is not
admissible on sale by dealers opting for lump sum/ composite tax & for
Schedule III goods i.e. Motor spirit goods & also to crude oil, lignite &
vehicles of any type & its equipments, accessories or spare parts as per
Notification Dt. 1-4-2008. As per Rule 42(2)(2A), the tax invoice in such case
shall have to be issued in triplicate. Original invoice is to be given to
buyer. Duplicate, duly endorsed by customs authorities is to be returned to
the seller. Triplicate is to be retained by the seller. Local sellers shall
have to dispatch goods with form 402, duly pre authenticated by his
7. REVERSAL OF ITC
ITC is required to be reversed (fully or partly)
when ITC availed goods are used for non-specified purposes. ITC is also
required to be adjusted for Debit Note or Credit Note for any change in
consideration if tax is separately shown or for purchase return.
8. ITC REVERSAL @ 2% FOR INTER STATE SALES
Input Tax Credit (ITC) will have to be reversed
w.e.f. 1st July, 2010 @ 2% of taxable turnover of purchases within the state,
of goods, other than Schedule-II (13) goods (bullion etc.), for which tax
credit is admissible, if the goods are either sold/ resold in the course of
interstate trade and commerce or are used as input in the manufacture of
goods, which are sold in the course of interstate trade and commerce. W.e.f.
01-10-2010, no such reversal will have to be made for following goods of
a) Entry 13 — Bullion, etc.
b) Entry 24 — Cotton & Cotton waste
c) Entry 48(i) — viz Isabgul, Jira, Variali, Methi, Suva,
Ajma, Asalia, Shalingda seeds, Khas Khas, Dhana, Dhanani Dal & Paper.
d) Entry 54 — Oildseeds, Peanuts, other taxable seeds &
e) Entry 76 — Timru Leaves or Beedi Leaves
9. ITC NOT ADMISSIBLE
ITC is not admissible, inter alia, & in
addition to items mentioned above, on the following purchases
• Vehicles - Its equipments, accessories and
spares (except for vehicle dealers).
• Naphtha, Natural & associated gas and LSHS, if
used for manufacturing fertilizers.
• For goods or property, not connected with
• For unsold stock at the time of closure of
• For Petrol, Diesel, crude oil & lignite unless
• For purchases from dealer who has opted for
lump sum payment u/s. 14/14A/14B/14C/14D.
• For Inter-State/import, URD/ exempt purchases
• For Goods used in manufacture of exempt goods
• For Goods which are given for right to use only
• If tax invoice is not available or tax is not
• For goods disposed of otherwise than by way of
sale resale or manufacture.
• For purchases during unregistered period except
for stock on date of Registration subject to conditions mentioned under the
Head "Compulsory Registration".
10. ITC – HOW TO USE
Unlike excise law, ITC of all taxes (VAT,
Purchase Tax, Addl. Tax, Entry Tax) is adjustable inter se without any sub
groups or without any restriction on inter head set off.
ITC is to be deducted from VAT payable and the
net amount of VAT is required to be paid.
If ITC is greater than VAT payable, it can be
adjusted against CST liability, and balance is to be carried forward in next
Unadjusted ITC other than of capital goods shall
be refunded within 2 years from the end of the year in which it became
ITC for export of goods shall be refunded within
3 months from end of the month in which goods are exported.
VIII. OPTION OF LUMP SUM PAYMENT OF TAX TO SMALL DEALERS — S.
1. Small Dealers, engaged in trading activity and a class
of notified manufacturers, being Bakery, Bricks manufacturers, having total
turnover not exceeding Rs. 50 lakhs in the preceding year, can opt to pay lump
sum tax on taxable turnover, in lieu of tax u/s. 7, provided the dealer is not
engaged in the activities of Inter State Sale or Purchase or, Transfer to or
from outside state branch or agent or, Import or, Export or, Sales/Purchases
through Agent or, Works Contract or, Leasing or and Manufacturing activity
other than notified manufacturing activity. At present only bakery and bricks
manufacturing are notified manufacturing activities.
2. Lump sum Tax Rates notified u/s. 14 are as under
@ 0.50% of taxable Turnover
@ 2.00% of taxable Turnover
@ 2.00% of taxable Turnover
3. The permission for lump sum payment of tax is valid up
to turnover of first Rs. 50 lakhs or so far as the registered dealer is not
undertaking any of the above prohibited activity. On turnover exceeding of 50
lakhs, or on undertaking prohibited activity, the dealer shall be liable to
pay tax under normal provisions of tax. On turnover exceeding 50 lakhs or on
suo moto opting out of lump sum scheme, the ITC of stock of taxable goods held
on the date of liability and which are purchased after
1-4-2008 and are of within 1 year purchases, will be admissible on furnishing
Form 112, along with the next return due after the exit from lump sum scheme.
4. In addition to lump sum tax at specified rate, the
dealer is liable to pay purchase tax under sections 9(1) & 9(3) and also the
Additional Tax u/s. 9(6) on such purchases. Further the dealer is not entitled
to ITC on his purchases. The dealer can neither issue Tax Invoice nor collect
VAT on sales.
5. PROCEDURE FOR APPLICATION FOR LUMP SUM PAYMENT
Application for the F.Y. 2006-07 was to be filed
before 31-5-2006 in Form 210 and permission for the same will be granted if
the dealer is not engaged in the activity of Inter State Sale or Purchase,
Transfer from/to Branch/Agent, Import, Export, Sales/Purchases through Agent,
Works Contract, Leasing and Manufacturing activity other than notified
manufacturing activity. The permission is granted in Form 211 within 15 days
from the date of application. Application for permission for subsequent year
is required to be made before 30th April of the relevant year. Newly
registered dealers have to file application within 90 days from the date of
registration. W.e.f. 1-4-2008, a dealer who is granted permission to pay Lump
Sum Tax, need not file fresh application for renewal of permission every year.
IX. COMPOSITION OF TAX ON WORKS CONTRACT U/s. 14A
1. Dealers engaged in the execution of works contract can,
in lieu of the amount of tax leviable, pay lump sum tax by way of composition
Polyester Textile Fabrics
Works of roads of all kinds including work of paving, mixing, metalling,
asphalting and earth work.
Works of building construction including Reinforced Cement Concrete and
masonry work but excluding air conditioning, firefighting, interior works
and electrical works if its total value exceeds ten per cent of total
value of works contract.
Works of cross drainage structure and bridges.
Works of digging and laying of pipelines of all kinds.
Works of dams, check dams, weirs, protection walls, canals and head works.
Works of excavation and mining.
Works of construction of jetty, port and break water
(viii) Works of construction of airport runwayys and landing strips.
Works of water storage structure including underground and overhead
Other Works Contract
2. In addition to lump sum tax, the dealer is
required to pay purchase tax under sections 9(1) & 9(3) and also the
Additional Tax u/s. 9(6) on such purchases. Further, the dealer is not
entitled to ITC on VAT paid on purchases nor can issue Tax Invoice or collect
VAT on sales. Prohibition against inter state purchases/ sale etc. as in
Sec.14, is applicable here also. There is no ceiling limit of turnover for
opting for composition.
3. Procedure —
Two Types of works contracts are contemplated
under Rule 28. In case of "On Going Works Contract" referred to in Rule
28(8)(bb), application for Lump Sum tax is to be made in Form 214A within 30
days before the commencement of the year and the permission shall be effective
from beginning of the year. The dealer who is earlier granted the permission
need not file fresh application for renewal. New dealers shall have to file
application within 90 days from the date of registration. The permission shall
be granted in Form 215A within 15 working days. For other works contractors,
the application is to be made for each contract separately in Form No. 214,
within 30 days from the beginning of the contract. Permission is granted in
Form 215. Such permission is effective from the date of the beginning of the
contract and is valid till its completion.
X. COMPOSITION OF TAX ON AGRICULTURAL PRODUCE U/S. 14B
1. Commission Agent engaged exclusively in the business of
agricultural produce and licensed as general commission agent with a market
committee established under the Gujarat Agricultural Produce Markets Act,
1963, can pay, in lieu of the amount of tax leviable, lump sum tax @ 0.05% by
way of composition subject to conditions prescribed therein.
Further the commission agent is not entitled to ITC on his
purchases nor can issue Tax Invoice or collect VAT on sales.
2. Procedure —
Application in Form 210A — Permission in Form 211A —
permission shall be effective from the tax period subsequent to the month in
which application is submitted. Permission is valid as long as the provisions
in this respect are complied with.
Permission is granted with a condition that agricultural
produce shall be sold by the commission agent within 12 months from the date
XI. COMPOSITION OF TAX ON TURNOVER OF RIGHT TO USE THE GOODS
— S. 14C
1. Dealers engaged in transferring right to use
any goods (lessor) can pay lump sum tax by way of composition @ 4%. Section
14C(2) provides that permission shall not be granted if the dealer derives
hire charges through transaction in the course of inter State trade and
commerce or exports, or through branch or agent located outside the Gujarat
State. Further the dealer is not entitled to ITC on VAT paid on any types of
purchases. Moreover, Tax Invoice cannot be issued nor any VAT can be collected
on sales. There is no limit on turnover.
Application is required to be made in Form 210B.
Permission is granted in Form 211B. Permission is effective from the tax
period subsequent to the month in which application is submitted. Permission
shall be valid so long as the provisions in this respect are complied with.
XII. COMPOSITION SCHEME ON SALES OF EATABLES BY
HOTELS, RESTAURANTS, CATERERS ETC. — S. 14D
S. 14D provides
for a scheme for dealers engaged in sale of eatables in any form (whether
processed or unprocessed), served, delivered or given in package from the
place of business of the dealer or any other place, to pay a lump sum tax by
way of composition @ 4% without any turnover limits.
For the purpose
of this section, the word "eatables" means all kind of foods for the purpose
of consumption including all types of beverages, water (mineral, purified or
aerated) and soda waters, ice-cream and kulfi, sweets and sweetmeats, fruits
and fruit juice, all type of milk preparations, bakery products etc.
engaged in the manufacture of Alcoholic and non-alcoholic beverages including
soda water, Aerated, nineral, purified, medicinal, ionic or demineralized
water or water sold in sealed container, Ice cream, kulfi, Biscuit (Branded)shall
not be granted permission to pay lump sum tax u/s. 14D
Application is required to be made in Form 210C within 90
days from the date of registration. From F.Y. 2007-08 and onwards, application
is to be filed within 30 days before the commencement of new financial year.
The permission granted is valid so long as the provisions in this respect are
complied with. W.e.f. 1-4-2008, the permission once granted need not be
renewed every year.
The dealer is required to display conspicuously, at each
place of his business, a notice with the phrase "Tax is not charged
Section 14D (5) provides that permission shall not be
granted to the dealer who purchases eatables or any raw material thereof, in
any form (whether processed or unprocessed) in the course of inter State trade
or commerce or import such goods from place outside the territory of India, or
receives eatables or raw material thereof (whether processed or unprocessed)
in any form from his branch situated outside the state or from consigning
agent outside the state.
XIII. REGISTRATION OF DEALERS
Two types of Registration, viz. compulsory and voluntary,
are contemplated under the Act.
1. COMPULSORY REGISTRATION S. 21
A dealer, liable to pay tax under section 3, has
to apply for registration u/s. 21 within 30 days of liability, unless deemed
to be registered u/s 23 because of registration in erstwhile laws. If so
applied within time limit, ITC of stock on date of liability, of goods,
purchased after 01-04-2008 & of not more than 1 year old, will be admissible
on furnishing Form 111 along with first return.
2. VOLUNTARY REGISTRATION SECTION 22
Where a dealer having fixed or regular place of
business in the state, and who is not required to obtain registration U/s. 21
can apply u/s. 22 for Voluntary Registration at any time. He has to give
interest free deposit of
Rs. 25,000/- which can be adjusted against tax/ interest/penalty payable by
3. REGISTRATION AS TRANSFEREE OF BUSINESS
Where any dealer registered under the GVAT Act,
2003 transfers his business in whole or in part, and if the transferee is not
a registered dealer under the Act, the later shall get have to obtain
registration under the Act, within 30 days from the date of transfer of
4. REGISTRATION AS LEGAL HEIR OF DECEASED DEALER
Where any dealer registered under the GVAT Act,
2003 dies and his legal heir continues the business, then the registration is
required to be obtained within 6 months from the date of transfer of business,
if the legal heir is not a registered dealer.
5. PROCEDURE FOR REGISTRATION UNDER GVAT ACT,
1. The dealer has to apply for registration in
Form No. 101 to the registering authority having jurisdiction over his chief
place of business. Where the dealer has more than one place of business,
application is required to be made with the registering authority having
jurisdiction over chief place of business. Only one Registration No. is issued
for all the places of business within the State. The dealer can choose chief
place of business from amongst his all the places. Where the dealer has no
fixed place of business within the State (non-localised dealer), application
is required to be made to The CTO Ahmedabad.
2. In case of compulsory registration, if the
application is within prescribed time limit of 30 days, the dealer shall get
registration from the date, he became liable to pay tax. In case of belated
application, registration shall be effective from the date of application. In
case of voluntary registration, it shall be effective from the date of
3. The following information are required to be
furnished to the registering authority in Form No. 101
Address, Date of Birth, PAN, IEC Code No, Central Excise Registration No,
Electrical Energy Supply Service No, Enrolment and Registration Certificate
Nos. under Gujarat Professional Tax Act and Registration Certificate No.
under CST Act, if any, Telephone No, Fax No, Email-id and web-site if any,
status of business, nature of business activities, name of the commodities
relating to business, details of bank accounts duly certified by the banker
along with date on which threshold turnover limit is crossed are to be
stated in the application form.
Form 101A is to be furnished showing details of additional places of
business in the State of Gujarat.
Form 101B is to be furnished showing addresses of branches or godowns
located outside Gujarat State.
Form 101C is to be furnished wherein specimen signature of authorized person
is to be furnished.
Form 101D is to be furnished wherein details of partners/directors/person
responsible are to be furnished.
Form 101E is to be furnished wherein details of Licensed Capacity, Installed
Capacity, Production, No. of persons employed, Electricity Consumer No.,
Annual consumption of Electricity etc., are to be furnished.
Form No. 106, a
declaration in respect of appointment of manager of the business is to be
6. DOCUMENTS TO BE ATTACHED WITH APPLICATION IN FORM NO.
Following Documents duly attested by STP/Advocate/Gazetted
Officers are required to be furnished along with Application for Registration
in Form 101.
of proprietor, karta, each partner of the firm or, each director of the
company (except for nominee directors of State or Central Govt.
organization) as the case may be.
partnership deed/memorandum and articles of association/trust deed, etc.
address of place of business:
— In case of
Owner: Proof of ownership of premises viz. copy of property card or
ownership deed or agreement with the builder or any other document.
— In case of
tenant/Sub-tenant: Proof of tenancy /Sub-tenancy like copy of tenancy
agreement or rent receipt or leave and license or consent letter, etc.
relating to residence of proprietor, karta, each partner of the firm or,
each director of the company (except for nominee directors of State or
Central Govt. organization) as the case may be.
7. FURNISHING OF SECURITY
A dealer, furnishing any three of the following
documents, shall pay security of Rs. 10,000/-.
a. last paid electricity bill in his name or
his parent’s name or his spouse’s name
b. last paid telephone bill in his name or his
parent’s name or his spouse’s name
c. PAN issued under IT Act, 1961
d. any document as proof of ownership of
principal place of business in his name or his parent’s name or his spouse’s
e. any document as proof of ownership of
residential property or any immovable property in his name or his parent’s
name or his spouse’s name
f. notarized photocopy of the passport of
proprietor, managing partner or managing director
g. Registration certificate under Shop, and
h. Registration Certificate obtained from
Customs and Central Excise Authority.
Where the applicant cannot furnish any three of
the above documents, the security not exceeding Rs. 50,000/- shall be
furnished. The security can be furnished in the form of bond executed in Form
105, or Furnishing of NSC, or Bank Guarantee.
8. TATKAAL REGISTRATION
Rule 6A provides for Tatkaal Registration.
Salient features of the same are as under.
Online Application in Form 101 for voluntary/ compulsory registration.
Security of Rs 10,000/-, refundable after two years, not adjustable against
tax, interest, penalty, is payable by way of E-Payment separately for GVAT &
CST Act. Accordingly, provisions of sub rules (1) to (4) of Rule 12 (i.e.,
relating to security deposit of Rs.10,000/- to 50,000/-, etc.) will not be
applicable to Tatkal Registration.
Refundable Fee of Rs 1,000/- by way of E-Payment for each registration under
GVAT or CST Act.
of PAN card along with any one of eight items prescribed separately for (a)
Proprietary Firm, (b) Private or Public Limited Company, (C) Partnership
Firm, HUF & Others is to be submitted
dealer does not furnish copy of PAN Card, any three (instead of one) of the
prescribed documents shall have to be submitted.
Within two working days, dealer will be called for primary hearing with
Registration No. will be issued within five working days.
Thereafter, post verification will be carried out & registration certificate
will be issued within thirty days.
localized dealers are not eligible for Tatkaal Registration.
XIV. TAX INVOICE
Under the GVAT Act, two types of invoices are prescribed.
Only a Registered Dealer, who has not opted for composition scheme, can issue
Tax Invoice, for taxable goods only, and that too, if the purchaser is a
registered dealer having TIN. Tax credit is available only against Tax
Invoice. Tax Invoice is required to be issued in duplicate, serially and
mechanically numbered and the words "Tax Invoice" is to be printed on Invoice.
Tax Invoice must contain prescribed details as per Rule 42 including the tax
amount separately. For transfer of ITC from Principal to Agent and vice versa,
Tax Invoice is required to be issued.
XV. RETAIL INVOICE
Retail Invoice should be issued in duplicate, serially and
mechanically numbered, where sale price exceeds Rs. 100. Words "Retail
Invoice" must be printed on the invoice. Invoice must contain details
prescribed vide Rule 42. For sale of exempt goods, inter state sale and for
sale to unregistered dealer, retail invoice is to be prepared. Tax need not be
charged separately, if rate of tax is mentioned.
XVI. FILING OF RETURN
The returns are to be filed as under:
1. HALF YEARLY RETURNS
Co-operative Societies engaged in the manufacture of sugar
or khandsari have to submit half yearly return in Form 201.
2. QUARTERLY RETURNS
(A) Irrespective of Tax Amount :
Dealers holding lump sum tax permission
u/s.14, 14A r.w. Rule 28(8)(bb), 14C and 14D
Form 202 and 202A
Dealers holding lump sum tax permission
Form 202, 202B and 202C
Form 201, 201A & 201B.
Form 201C Half
Dealers of Readymade Garments, Cutlery, Hardware, Provision
store, Medical Store cereals/ pulses are exempted from furnishing Form 201C
If tax payment exceeds Rs.60,000/- in these cases, tax will
have to be paid Monthly & a statement as may be prescribed by CCT (Still Not
Prescribed) will have to be submitted for first two months of the quarter
within 30 Days of the end of the month.
(B) If tax does not exceed Rs.60,000/- in current or
Previous Year viz.
a) Normal Works
Contractor i.e. Sec.14A r.w.
Form 201, 201A & 201B
Tax permission i.e. Sec.14A r.w. Rules
28(8)(a) & (b).
Form 201C Half Yearly
b) Dealers other than Monthly, half yearly & above
mentioned Quarterly Dealers (e.g. Dealers in OGS Goods, Manufacturers,
Form 201, 201A & 201B.
Form 201C Half Yearly
Dealers of Readymade Garments, Cutlery, Hardwar, Provision
store, Medical Store cereals/ ulses are exempted from furnishing Form 201C
3. MONTHLY RETURN
Following dealers are liable to file monthly returns in
Forms 201, Form 201A (Tax invoice sale register), Form 201B (Tax invoice
purchase register). They have also to submit Form 201C (Details of Stock
(A) Irrespective of Tax Amount
Importer, Exporter, SEZ Unit/Developer, Refundees u/s. 40,
Remission u/s. 41, Dealers of Schedule III goods, Dealers enjoying
Exemption/Deferment under Incentive Scheme.
(B) If Tax exceeds Rs. 60,000/- in current or Previous Year
Normal works contract dealers (Other than "ongoing works
contractors") opting for lump sum for under Rule 28(8)(a) & dealers other than
those mentioned in half yearly & quarterly category (e.g. Dealers in OGS
Goods, Manufacturers, etc.).
Dealers of Readymade Garments, Cutlery, Hardware, Provision
store, Medical Store, cereals/ pulses are exempted from furnishing Form 201C
4. ADDITIONAL FORMS
In case of following dealers, Additional Forms as
under are also to be submitted:
Dealer of Schedule III Goods
Form 212 & Form 213
Dealer enjoying exemption
Dealer enjoying Deferment
Dealer claiming credit of TDS
Form 216 – A
5. REVISE RETURN
Return can be revised within one month from the expiry of
the last date prescribed for original return. The differential tax is to be
paid with interest.
6. ANNUAL RETURN – SELF ASSESSMENT
Every Registered Dealer shall furnish Annual Return by way
of Self Assessment, disallowing all inadmissible claims, by 30th June
after the end of the financial year in following Form:
(a) All lump sum dealers excluding
normal works contractor
(b) All other dealers including
Form 205 & 205A
normal Works Contractor
(other than "On Going
In addition, Form 202A in case of (a) and Form 201A, 201B &
201C in case of (b) will have to submitted if there is a change as compared to
the figures submitted earlier. W.e.f. 1-8-2009, Dealers liable for VAT
Audit can submit Annual Return within 9 Months from end of the Year.
7. MANDATORY E-FILING OF RETURNS
Undermentioned categories of dealers shall have
to submit their returns by way of e-filing only.
i) Having turnover in current year or previous
year exceeding Rs. 50 lakhs or
ii) Making zero rated sale or
iii) Enjoying Exemption/Deferment, or
iv) Importers, or
v) Exporters, or
vi) Developer/Co-Developer of SEZ or
vii) Carrying on business in processing
area/demarcated area of SEZ, or
viii) Registered under the CST Act, or
ix) Dealing in Timber, Ceramic Tiles, Scrap of
Iron and steel, Tobacco and tobacco products (excluding unmanufactured
tobacco), and Major Minerals as may be specified by the Commissioner.
Such dealers shall have to file CST return also online
along with Appendix I & II. Such dealers shall also have to furnish an
undertaking duly signed in prescribed form. Besides, all dealers requiring
‘C’, ‘F’, ‘H’ forms shall also have to e-file return along with Appendix I &
II as system of issuing such forms in advance has been discontinued. Other
dealers voluntarily E-filing their returns are exempted from filing hard
copies of Form 201, 201-A, 201-B & 201-C on submission of bar coded receipt to
Dept. E-filing of Annual accounts containing Trading Account, Profit & Loss
A/c and Balance Sheet is mandatory for a dealer, having total turnover
exceeding Rs. 1 crore only.
8. TIME LIMIT FOR FILING OF RETURN
A) Monthly and quarterly returns are to be filed
within 30 days from the end of the month or quarter as the case may be to
which the return relates. Whereas Annual return is to be filed within three
months from the end of the year to which the annual return relates. W.e.f.
01-08-2009, Dealers liable for VAT Audit can submit Annual Return within 9
Months from end of the Year.
B) Vide Public Circular No. GUJKA/VAT/15/2010-11/OTW.105/
92 Dt.23/12/2010, due dates for E-Filing returns have been changed, so as to
afford more time to the dealers as under.
i) Monthly Return Dealers :
a. Within 30 days from the end of the month,
if tax in the relevant month is Rs. 5000/- or less
b. Within 40 days from the end of the month,
if tax in the relevant month is more than Rs. 5000/-
ii) Quarterly Return Dealers :
Within 45 days from the end of the quarter
C) Vide Public Circular No. GUJKA/VAT-15/2010-11/OTW.111/
Time Limit for E-Filing of Returns has been
further extended, inter alia, for Returns of December 2010 & onwards by 30
Days, in addition to the applicable time limit.
The benefit of the aforesaid extension will be
admissible only if, the tax as per Return has been paid within extended Time
These extension are temporary in nature only and
are likely to be withdrawn as soon as the Department gets equipped with
9. PAYMENT OF TAX
Payment of tax is to be made within 22 days from
the end of the month/ quarter to which the return relates. In case of dealers
of Schedule III goods, the tax payment is to be made within 12 days. Where the
payment is made by cheque, date of clearing of cheque will be treated as date
of payment. Tax is to be paid in Form 207 (Challan) in Govt. Treasury where
chief place of business of dealer is situated. The dealers having tax paid/
payable exceeding Rs. 10 lakhs shall have to make E-payment only as per Public
Circular Dt. 9-3-2009.
XVII. AUDIT UNDER GVAT
As per Section 63, a dealer, having turnover exceeding Rs.1
crore and Taxable Turnover exceeding Rs. 20 lakhs, is liable to get his
accounts audited within 6 months from the end of the year and submit the same
within 1 month of the date of the Audit Report. W.e.f. 01-08-2009, Dealers
have to obtain Audit Report within 9 Months from end of the Year.
XVIII. FORMS FOR CARRIAGE OF GOODS
a) Goods going outside the State must be
accompanied by Form 402. Similarly, goods coming into the State must be
accompanied by Form 403. In case of Specified goods as mentioned below, the
Form 402/403, duly authenticated by the concerned authority in advance is to
be used. Such preantheticated forms can be obtained in a book of 25 forms on
payment of court fee of Rs.25. No such fee is payable for obtaining such forms
online by making online application.
b) Specified goods for Form 402
Edible Oil, Oil Seeds, Oil Cakes, Iron and Steel,
Ferrous and non-ferrous metals and scrap, Ceramic Products, Cumin Seeds(Jeera),
Ani Seeds (Variali), Psyllium Seeds and Psyllium husk (Isabgul and Isabgul
husk), Brass Parts, Processed Tobacco, All products of Tobacco including Bidi,
Cigarettes, Gutkha, Scented Tobacco, Chhikni, but excluding un manufactured
tobacco, zero rated sale to SEZ.
c) Specified goods for Form 403
Motor Vehicles, Cement, Marble, Granite, Kota
stones, Naphtha, Light Diesel Oil, High Speed Diesel Oil, Iron and Steel,
Plywood, Block Boards, Boards, Decorative and Laminated Sheets, Tea in
Leaf/Powder Form, Battery operated vehicles, Processed Tobacco, All products
of Tobacco including Bidi, Cigarettes, Gutkha, Scented Tobacco, Chhikni but
excluding un manufactured tobacco, and Yarn excepting Nylon Yarn, Polyester
Viscose Yarn and Cotton Yarn.
d) For Movement of oil cakes and edible oil
including refined edible oil even within the State, a duly authenticated Form
402 was made mandatory w.e.f.
5-12-2006. The same is postponed w.e.f. 7-5-2007.
e) Form No. 402 shall be duly filled in
triplicate. "Original" and "Duplicate" copies shall be carried with the
vehicle. Both copies shall be endorsed by the check-post officer and
"original" shall be deposited with check-post officer. "Triplicate" copy shall
be retained by the consignor.
Form No. 403 shall be duly filled in triplicate.
All the three copies shall be carried with the vehicle. "Original" shall be
deposited with check-post officer. "Duplicate" and "Triplicate" copies shall
be endorsed by the check-post officer. "Duplicate" shall be forwarded to the
consignee of the goods and "Triplicate" shall be retained by the carrier.
XIV. TAX DEDUCTION AT SOURCE
Any Person responsible for paying specified sale
amount exceeding Rs. 1 crore to the contractor or sub-contractor is liable to
deduct Tax at Source at the rates of composition mentioned hereinabove. The
deductor has to issue certificate of TDS in Form 703 with tax paid challan in
original to contractee. Out of the gross payment, the amount liable for
deduction is to be arrived at by deducting labour charges, price of
interstate/import purchases as per declaration given by the
contractor/sub-contractor in Form 702. W.e.f. 1-8-2009, every person liable to
make TDS should apply for Tax Deduction Account Number (TDN) within prescribed
time in prescribed form. TDN should be quoted on all prescribed documents etc.
Salient features of rules for T.D.S., notified
vide Notification Dated 24/12/2009 are as under,
person liable for T.D.S. shall have to apply in Form 706, online on
Department’s Website, within 30 days, for Tax Deduction Account Number. A
copy of such application shall be submitted within 7 days of the
application, along with the particulars to be prescribed by the Commissioner
by public circular for registered dealers or officer of central/ state
govt./ local authority & along with the particulars prescribed in rules for
other persons. The number will be issued in Form 707.
person deducting tax shall file quarterly return for T.D.S., in Form 704,
within 30 days, on Department’s Website.
person claiming credit of T.D.S. shall have to file Form 216A, within 30
days of the tax period, alongwith regular return.
Certificate in Form 703, shall be serially, mechanically numbered in
duplicate. Original should be given to the Contractor/ Sub-Contractor.
person liable for T.D.S. shall have to maintain the prescribed particulars
in Form 705.
cessation of liability for T.D.S., an application in Form 708 shall have to
be submitted on Department’s Website for cancellation of Tax Deduction
XX. NOTIFICATIONS FOR CERTAIN ITEMS
Notifications have been issued for following
items to clarify the coverage thereof.
1. Items of Charkha and other Implements
2. Items of Farsan
3. Handicraft Articles
4. Items of Khadi Garments or Made ups there of
5. Medical Equipments, Devices and Implants
6. Industrial Inputs
7. Agriculture Inputs
8. Kirana Items
9. Packing Materials
10. Information Technology Products
11. Works Contracts
XXI. Maintenance of records
Although no specific format has been prescribed for the maintenance of records
under GVAT Act, 2003, it is expected that every dealer shall keep such
accounts and records as are usually required to be maintained in the normal
course of business.
62 of the GVAT Act, 2003 requires every dealer to maintain a true account
of the value of the goods sold purchased, supplied & delivery of goods made by
him. Every dealer shall ordinarily keep all his accounts, registers and
documents relating to his stocks of goods, purchases, sales and delivery of
goods made by him or payments made or received towards sale or purchase of
goods, at the place or places of business specified in his certificate of
registration. Detailed provisions are made in Rule 45 regarding the details &
records to be maintained.
Section 8(2), the effect of credit notes/debit notes for goods return or
variation in sale price is to be taken in the period in which the adjustment
is made in the books. It is also provided that if such credit/debit notes have
the effect of varying the sale/purchase price then tax element should be shown
Preservation of books of account, registers, etc.
Every registered dealer shall preserve all books
of accounts, registers and other documents relating to the stocks, purchases,
dispatches and deliveries of goods and payments made towards sale or purchase
of goods for a period of not less than six years from the expiry of the year
to which they relate. (Rule 45(13)). It is also provided that if within the
said six years any proceedings are initiated then the dealer should preserve
the records beyond six years till final order is passed in respect of the said