Wednesday, 17 April 2013

Tamil Nadu VAT Audit


The Legislative Assembly of the State of Tamil Nadu in the 57th Year of the Republic of India had formulated the Act and Rules consolidating and amending the law relating to the levy of tax on the sale or purchase of goods in the State of Tamil Nadu. The Act so formulated is the Tamil Nadu VAT Act 2006 and the Rules formulated by the Government of Tamil Nadu is the Tamil Nadu VAT Rules 2007.


The Act and the Rule has come into force on January 1, 2007 and it is applicable to the whole State of Tamil Nadu.

Tamil Nadu Vat Act 2006:                                                                                                                  

As per this Act every dealer shall pay tax at the rate specified on every sale of the goods specified in the First Schedule.

Every dealer dealing in goods subject to VAT, is eligible to deduct the tax paid on purchases (input tax) from the tax payable on sales, subject to the conditions prescribed.

Tamil Nadu Vat Audit:

Section 63 A – TNVAT Act, 2006

Subject to the Circular No. 09 / 2012  Dated 14th September, 2012  issued by the Department, a new Section 63-A to TNVAT Act, 2006 has been introduced by the Act No.18 of 2012.

As per this Section a registered dealer has to get his accounts audited by an accountant if the total turnover of the dealer including zero rate sale and sale in the course of inter-state trade or commerce as specified in section 3 of the CST Act, 1956 exceeds one crore rupees in a year.

The Accountant here includes a Cost Accountant or a Chartered Accountant.

Applicability: The TNVAT Audit is applicable from the FY 2012-13.

Rule 16 A of the TNVAT Rules, 2007

Rule 16A of TNVAT Rules, 2007 was formulated to provide the procedure for filing the Mandatory Audit Report with the Commercial Taxes Department.

As per this every registered dealer liable to get his accounts audited as provided under sub-section (1) of section 63 A shall furnish the audit report in Form – WW within 7 months from the end of the year in duplicate.
The following information has to be provided along with the Form WW (Audit Report U/S 63-A of the Tamil Nadu Value Added Tax Act, 2006):

-          Summary of the additional tax liability or additional refund due to the dealer as on the date of the audit for the year.
-          Annexure:
o        Part A – General Information
o        Part B – Computation of Turnover Assessable under the Tamil Nadu Value Added Tax Act, 2006
o        Computation of Purchases.
o        Details of Input Tax Credit Reversal / Adjustment
o        Turnover under the Central Sales Tax Act, 1956
o        Details of Input Tax Credit availed on purchase of Capital Goods (Other than parts and accessories)
o        Total input tax credit on Capital goods
o        Details of delayed filing of returns / payment of taxes
o        In case of trading concerns other quantitative information

The Notice for the levy of penalty / Interest will be issued in Form RR

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