1. finance
2. accounting and auditing

DEPARTMENT OF SALES TAX
MANUAL
OF
PROCEDURE
REFUND & REFUND AUDIT
REFUND & REFUND AUDIT MANUAL
INDEX
Sr. No.
Subject
Page No.
1.
Objectives of the branch.
From - To
3
2.
Organisational Structure.
4 to 5
3.
Relevant provisions of Act and Rules.
6 to 15
4.
Relevant Internal and Trade Circulars.
16 to 32
5.
Competent Authorities and Targets.
33
6.
The process in brief.
34
7.
Procedure of Branch.
35 to 41
8.
Refund Audit Procedure.
42 to 62
9.
Duties & Responsibilities.
63 to 70
10.
Inspection procedure & frequency.
71
11.
Responsibility & date for updating the manual.
71
12.
Record filing system.
71
13.
Reporting Formats of the Branch.
72 to 74
14.
Various control Registers.
75 to 76
15.
Annexures.
77 to 84
10109
2
2. OBJECTIVES OF THE BRANCH:-
●
Processing refund claims within the prescribed time limits.
●
To ensure that, the refund claim made in the return is valid
and accurate by audit.
3
3. ORGANISATIONAL STRUCTURE:A) MUMBAI :Design.
Sanctioned
strength
J.C.
D.C.
A.C.
STO
STI
Clerk
Othe
r
Total
1
8
26
21
70
70
67
263
B) MOFFUSIL :Sanctioned strength as per re-organisation:Designation
D.C.
Thane
Kalyan
2
Thane Rural
Nalasopara
1
Raigad
2
Pune
Solapur
Osmanabad
Barshi
4
2
Kolhapur
Satara
Sangli
Ratnagiri
Oras
2
1
1
Nasik
Malegaon
Ahemadnaga
r
2
Dhule
Jalgaon
Nandurbar
2
A.C.
STO
STI
Clerk
Total
Thane Division
2
4
7
11
26
1
3
3
7
Thane Rural Division
3
7
16
17
44
1
2
3
6
Raigad Division
2
1
8
8
21
Pune Division
6
14
36
32
92
1
3
9
10
25
1
1
1
3
1
1
1
3
Kolhapur Division
2
5
12
12
33
1
2
2
6
1
2
2
6
1
2
3
6
1
1
2
4
Nasik Division
2
3
8
10
25
1
1
2
4
1
Dhule Division
2
3
1
4
3
2
6
10
2
1
8
2
2
25
5
3
Designation
Nagpur
Chandrapur
Gondia
Gadchiroli
Vardha
Bhandara
Amravati
Yeotmal
Khamgaon
Akola
Vashim
Aurangabad
Beed
Jalna
Nanded
Parbhani
Latur
Hingoli
D.C.
A.C.
STO
STI
Nagpur Division
2
2
5
1
1
2
1
Amravati Division
2
3
1
1
2
2
Aurangabad Division
2
3
1
1
2
3
1
1
5
Clerk
12
1
1
Total
1
1
12
1
1
1
2
2
33
3
2
1
4
3
9
1
1
2
1
7
2
2
5
1
23
4
4
8
2
12
1
1
10
1
2
1
8
2
2
12
2
3
2
27
4
4
29
4
6
3
RELEVANT PROVISIONS OF ACT AND RULE:3.1
3.1.1
RELEVANT PROVISIONS OF ACT:-
Section-22. Audit –
(1) With a view of promoting compliance with the provisions of this Act, the
Commissioner may arrange for audit of the business of any registered dealer.
For the purpose of this section, the selection of dealers for audit shall be made
from amongst the dealers,—
(a)
who have not filed returns by the prescribed dates; or
(b)
who have claimed refund of tax; or
(c)
where the Commissioner is not, prima-facie, satisfied with the
correctness of any return filed by a dealer or is not satisfied with any claim
made, deduction claimed or turnover disclosed in any return filed by the
dealer; or
(d)
who are selected by the Commissioner on the basis of the application
of any criteria or on a random selection basis; or
(e)
where the Commissioner has reason to believe that detailed scrutiny of
the case is necessary.
(2)………..
(3) On the appointed day or, as the case may be, at anytime within the aforesaid
period, any officer to whom the powers and duties under this section have been
delegated, by the Commissioner, in writing, may conduct audit of the business.
(The above sub-section (3) is deleted by the Maharashtra Act No. XXV of 2007
Dt. 06.08.2007).
(4) ………..
(5) (a) During the course of the audit, the officer may require the dealer,—
(i)
to afford him the necessary facility to inspect such books of accounts or
6
other documents as he may require and which may be available at such place,
(ii) to afford him the necessary facility to check or verify the cash or stock
which may be found therein. And
(iii)to furnish such information as he may require as to any matter which may
be useful for or relevant to any proceedings under this Act.
(b) The officer conducting the audit shall on no account remove or cause to he
removed any books of accounts, other documents or any cash or stock.
(6) ………...
(7)…………..
(8) ………...
3.1.2
Section-50. Refund of excess payment –
(1) Subject to the other provisions of this Act and the rules made there under,
the Commissioner shall, by order refund to a person amount of tax, penalty,
interest, deposit and fee except when the fee is paid by way of court fee
stamp , if any, paid by such person in excess of the amount due from him. The
refund may be either by deduction of such excess from the amount of tax,
penalty, amount forfeited and interest due, if any, in respect of any other
period or in any other case, by cash payment:
(In the above para for the words “the commissioner shall refund” the words
“the Commissioner shall, by order refund” are substituted by the
Maharashtra Act No. XXXII of 2006 Dt. 05.08.2006)
Provided that, the Commissioner shall first apply such excess towards the
recovery of any amount due in respect of which a notice under subsection (4)
of section 32 has been issued, or, as the case may be. any amount which is due
as per any return or revised return but not paid and shall then refund the
balance, if any.
(2) Where any refund is due to any dealer according to the return or revised
return furnished by him for any period, then subject to the other provisions of
7
this Act including the provisions regarding provisional refunds such refund
may provisionally be adjusted by him against the tax due and payable as per
the returns or revised return furnished under section 20 for any subsequent
period: the word, “subsequent” shall be deleted with effect from 20th June
2006.
Provided that, the amount of tax or penalty, interest or sum forfeited or all of
them due from, and payable by, the dealer on the date of such adjustment
shall first be deducted from such refund before making the adjustment.
(For the above subsection (2) the following subsection (2) is substituted by the
Maharashtra Act No. XXXII of 2006 Dt. 05.08.2006)
(2) If a registered dealer has filed any returns, fresh returns or revised
returns in respect of any period contained in any year and any amount is
refundable to the said dealer according to the return, fresh return or revised
return, then subject to rules, the dealer may adjust such refund against the
amount due as per any return, fresh return or revised return for any
subsequent period contained in the said year, filed under this Act or the
Central Sales Tax Act, 1956 or the Maharashtra Tax on the Entry of Goods into
Local Areas Act, 2002.”
3.1.3
Section-51. Grant of Refunds –
(1) Where a registered dealer has in any return, fresh return or revised return
shown any amount to be refundable and has not undertaken to adjust such
amount against the amount due as per any subsequent return in accordance
with section 50, the Commissioner shall, on an application made by the dealer
and subject to rules, and the other provisions of this Act, grant refund of such
amount to the said dealer.
(2) (a) The registered dealer, may after the end of the year to
which the
return, fresh return or revised return relates, make an application in the
prescribed form after filing the said return for grant of refund of the amount
8
claimed refundable as aforesaid. The Commissioner may within one month of
the receipt of the application call for such additional information as he may
think necessary. The refunds relating to all the periods contained in one year
may be granted by a single order.”
(b) Notwithstanding anything contained in clause (a), where a dealer has
obtained a registration certificate as provided under this Act, then the refund
in respect of the returns, fresh returns or revised returns in respect of the year
containing the date of effect of registration shall be granted within six months
of the end of the year succeeding the said year:
Provided that, the said dealer may apply in the prescribed form to the
Commissioner at any time after the end of the said succeeding year to which
the refund relates for grant of the said refund.
Provided further that, where the return, fresh return or, as the case may be, revised
return is filed at any time after the date prescribed for filing the last return of the said
year, then the refund shall be granted within eighteen months of the date of filing of
the return, fresh return or revised return.
(The above proviso is deleted by the Maharashtra Act No. XXV of 2007 Dt.
06.08.2007)
(3) (a) Notwithstanding anything contained in sub-section (2), if a dealer is,—
(i) an exporter within the meaning of sub-section (1) or sub-section (3) of
section 5 of the Central Sales Tax Act, 1956 ; or
(ii) a
unit
specified
in
the
Explanation
to
sub-section
(3)
of
section 8 ; or
(iii) a holder of a Certificate of Entitlement under any Package Scheme of
Incentives except the New Package Scheme of Incentives for Tourism Projects,
1999,
(iv) selling any goods in the course of inter-State trade or commerce; or
(v) the Canteen Stores Department and the Indian Naval Canteen Services,”
9
then he may apply in the prescribed form to the Commissioner after filing the
return for grant of refund relating to the period covered by a return, fresh
return or revised return; or
(b) The Commissioner, within one month of the receipt of the said
application,—
(i) may require the dealer to furnish such bank guarantees for such amounts
from such banks, for such periods and to such authorities as may be
prescribed; and
(ii) may call for such additional information as he may think necessary.
(4) The Commissioner shall grant the refund under this section within three
months of the receipt of application or receipt of additional information
whichever is later. If the additional information is not furnished, then the
refund shall be granted within six months of the receipt of the application.
(5) Notwithstanding anything contained in paragraph (a), the dealer may at
his option furnish a bank guarantee for such amount, from such bank, for
such periods and to such authorities as may be prescribed and on the dealer
furnishing such bank guarantee, the Commissioner shall grant the refund due
under sub-section (2) or (3) within one month of the furnishing of the bank
guarantee irrespective of whether the additional information has been
furnished.”
(6) (a) If before the grant of refund under this section, a notice for assessment
covering the period to which the return relates is issued or if any proceedings
under sub-section (3) or sub-section (4) of section 64 are initiated in respect of
the period to which the return relates, then,—
(i) if the dealer has not furnished a bank guarantee then no refund under this
section shall be granted ; and
(ii) if the dealer has furnished a bank guarantee then an amount equal to the
guaranteed amount shall be refunded.
1
(b) If it is found as a result of any order passed under this Act that the refund
granted under this section is in excess of the refund, if any, determined as per
the said order, then the excess amount shall be recovered as if it is an amount
of tax due from the dealer and the dealer shall be liable to pay simple interest
at the prescribed rate per month or part thereof from the date of the grant of
refund.
(7) No refund under this section shall be granted unless an application as
provided is made and no application under this section shall be entertained
unless it is made within three years from the end of the year containing the
period to which the return relates.
3.1.4
Section- 52. Interest on amount of refund –
Where refund of any tax becomes due to a registered dealer, he shall, subject
to rules, if any, be entitled to receive, in addition to the refund, simple interest
at the prescribed rate on the amount of refund for the period commencing on
the date next following the last date of the period to which the refund relates
and ending on the date of the order sanctioning the refund or for a period of
twenty four months, whichever is less. The interest shall be calculated on the
amount of refund due to the registered dealer in respect of the said period
after deducting therefrom the amount of penalty, sum forfeited and interest, if
any, charged in respect of the said period and also the amount of refund, if
any, adjusted towards any recovery under this Act or any earlier law or as the
case may be, under the Central Sales Tax Act, 1956. If, as a result of any order
passed under this Act, the amount of such refund is enhanced or reduced, as
the case may be, such interest shall be enhanced or reduced accordingly. If the
interest is reduced, then the amount granted in excess shall be recovered as if
it is an amount payable under this Act.
Provided that, interest under this section shall not be granted towards any
refund granted under section 51.
Explanation. —For the purposes of this section, where the refund of tax,
1
whether in full or in part, includes any amount of refund on any payment of
tax made after the date prescribed for making the last payment in respect of
the said period, then the interest, in so far as it relates to the refund arising
from such payment, shall be calculated from the date of such payment to the
date of such order.
3.1.5
(1)
Section-53. Interest on delayed refund Where an amount required to be refunded by the Commissioner to any
person, by virtue of the provisions contained in section 51 or by virtue of an
order passed under any other provision of this Act, is not so refunded to him
within ninety days of the end of the respective period provided in section 51
or, as the case may be, of the date of the said order, the Commissioner shall
pay such person simple interest at the prescribed rate on the said amount
from the date immediately following the expiry of the period of ninety days
to the date of the refund.
Provided that, where the amount becomes refundable by virtue of an order of
the Tribunal or the High Court or the Supreme Court, the interest under the
provisions of this section shall be payable from the date immediately
following the expiry of period of ninety days from the date of receipt of the
order of the Tribunal, the High Court or the Supreme Court, by the officer
whose order forms the subject of the proceedings before the Tribunal, the
High Court or the Supreme Court, to the date of refund. The applicant dealer
or person may supply to the said officer a certified copy of such order and if
the copy is so furnished, interest shall become payable after the expiry of
period of ninety days from the date of such supply.
Explanation. —If the delay in granting the refund within the period of ninety
days aforesaid is attributable to the said person, whether wholly or in part,
the period of the delay attributable to him shall be excluded from the period
for which interest is payable.
(2) Where any question arises as to the period to be excluded for the purposes
1
of calculation of interest under the provisions of this section, such question
shall be determined by the Commissioner, whose decision shall be final.
1.1.5
Other Relevant provisions of the Maharashtra Value Added Tax Act,
2002
Section – 20
Returns and Self-assessment.
Section – 21
No notice for Assessment in certain cases.
Section – 23
Assessment.
Section – 48
Set-off, refund, etc.
Section - 49
Refund of tax on declared goods sold in the course of interstate
trade or commerce.
Section – 65
Cross-checking of transactions.
Section – 96
Savings
3.2
RELEVANT PROVISIONS OF RULE:-
3.2.1
Rule-60.
Grant of Refund.-
(1)Application for refund under section 51 shall be made in form 501.
(2)When the Commissioner is satisfied that a refund is due, he shall pass
an order in Form 502, showing the amount of refund due and shall
communicate the same to the dealer.
(3)When an order for refund has been made under any rule, the
Commissioner shall, if Applicant desires payment in cash, issue to him a
refund payment order either in form 503 or in form 504. If the dealer
desires adjustment of refund, against tax payable in respect of any
subsequent period contained in the year to which the refund relates under
this Act, the Central Sales Tax Act,1956, or the Maharashtra Tax on Entry
of Goods into Local Areas Act, 2003, the Commissioner shall issue a
Refund Adjustment Order in form 506.
1
3.2.2
Rule-61.
Bank Guarantee.-
The Bank Guarantee shall be obtained from any branch of a bank notified as a
Government Treasury. The maximum period for a Bank Guarantee shall be
of 36 months. It shall be furnished to respective Joint Commissioner in charge
of grant of refunds. The Bank Guarantee shall be for such amounts and such
periods as the Commissioner may by public notice notify from time to time.”
3.2.3 Rule-62.
Order sanctioning interest on delayed
refunds:-
(1) Where upon an application by any person claiming interest on any
delayed refund or otherwise the Commissioner is satisfied that such
interest is due and payable to the applicant or any person under section
53, the Commissioner shall record an order specifying therein the amount
of refund, the payment of which was delayed, the period of delay for
which interest is payable and the amount of interest payable by the
Commissioner therefore, and shall communicate the same to the applicant
or person concerned.
(2) When an order for payment of interest on any delayed refund has been
made under this rule, the Commissioner shall issue to the applicant or
person concerned an interest payment order in Form 505.
3.3
Other Relevant provisions of the Maharashtra Value Added Tax
Rule, 2005
Rule – 17
Rule –19
Submissions of returns.
Special provision for first and last return in certain cases and for
dealers under the package scheme of incentives
Separate return.
Rule – 20
Complete and self-consistent return.
Rule – 21
Form of Notice for assessment.
Rule – 23
Form of order of assessment.
Rule – 24
Application for cancellation of assessment order.
Rule – 25
Order imposing penalty or interest.
Rule –18
1
Rule – 51
Rule – 52
Rule – 53
Rule – 54
Rule – 55
Rule – 68
Rule – 77
Rule – 79
Rule – 88
Claim and grant of set-off in respect of purchases held in stock
on the appointed day.
Claim and grant of set-off in respect of purchases made in the
periods commencing on or after the appointed day.
Reduction in set-off.
Non-admissibility of set-off.
Condition for grant of set-off or refund and adjustment of
drawback, set-off in certain circumstances.
Preservation of books of accounts, registers, etc.
Particulars to be specified in a tax invoice, bill or cash
memorandum.
Refund of tax to eligible units.
Rates of interest.
4.
Relevant Internal and Trade Circulars:-
4.1
Guidelines issued vide Internal Circular no.
No.:- VAT-2008/JC./ Refund and Refund Audit / B- 4579 Mumbai, Dt :
13.03.2008, Internal Circular No. 6A of 2008.
Sub : Refunds under MVAT Act.
Modifications in Internal Circular 5A of 2008
Ref:- Internal Circular No. 37A of 2007 Dt. 28.12.2007 .
Internal Circular No. 5 A of 2007 Dt. 05.03.2008.
1) INTRODUCTORY :This office had earlier issued Internal Circulars No. 37 A of 2007 Dt.
28th December, 2007 and 5A of 2008 Dt. 05.03.2008. These circulars were
issued to provide the guidelines for facilitating early processing of refunds
and to remove the difficulties faced in processing the refund claims.
The pendancy of the refund has been reviewed and in addition to
earlier instructions, fresh guidelines are given hereunder, to expedite the
process of granting of refund and completion of refund audits.
1
2) GRANT OF REFUND :Ι. All the cases, where the dealer has filed returns for the relevant
period on or before 25th February 2008 would be eligible for grant
of refund without prior Refund Audit and application in Form 501
is filed on or before 19th March 2008, The refund without pre audit,
as per earlier circulars was not allowed in respect of the claimant
dealers (both manufacturers and traders) of Iron and Steel and
Dyes & Chemicals. However, certain relaxations are hereby given
to process the refund claims in respect of such dealers, if they fulfill
any of the following conditions. This relaxation is made only for the
refund processed up to 31.03.2008.
α) If the Refund Audit is completed by the Refund Audit Branch
of such dealers for any previous period and no substantial
reduction in refund amount is noticed after the Refund Audit
or
β) If such dealers have submitted the Statutory Audit Report in
Form 704 for previous year.
χ) If the dealer is a manufacturer.
The departmental authorities are instructed to start the Refund Audit
immediately after 1st April, 2008 of the dealers to whom pre audit
refund is granted. The above mentioned categories will be audited on
priority.
ΙΙ. The copy of Return claiming the refund should be obtained from
the Return Branch. The dealer may be called to produce the copies
of the challans, if necessary. The instructions contained in Circular
5 T of 2008 should be scrupulously followed. However, the
claimant dealer if encloses certified copies of the returns along
with the application in Form 501, then such certified copies may
be considered.
1
ΙΙΙ. A certificate should be obtained from the dealer, certifying that,
no dues are outstanding against him and he has not carried
forward this refund in any of the earlier or subsequent returns.
Ις. The dealer should be asked to submit the necessary information
required to process the refund claim. This communication should
invariably be made in writing and the dealer should be made
aware that his claim of refund shall not be processed unless the
requisite information is submitted by him.
ς. In case, the refund granting authority decides to assess the dealer,
then the notice for assessment should be issued within a period of
3 months from the date of submitting Form 501.
ςΙ. The refund should be granted only in respect of the refund which
is due. e.g. in case of a P.S.I. dealer who holds the entitlement
certificate for part of an industrial undertaking through
investment in a expansion unit and whose production from the all
JC old and expansion investments is identifiable, (i.e. production
facilities are separate), then in such cases, the refund will be
granted only in respect of purchases corresponding to the
production of the expansion unit in the total production. Cases in
which the investment in expansion unit does not result in
identifiable
(separate)
production
capacity
but
strengthens/upgrades the existing technology, product quality or
quantity, purchases entitled for refund shall be worked out in
proportion to the new (PSI) investment in the total investment.
ςΙΙ. Where the dealer has submitted application in Form 501 and
subsequently revised the corresponding return claiming refund
for any reasons, then the corresponding application in Form 501
would become redundant and such dealer should be asked to
submit fresh application in Form 501 to that effect. In cases where,
after submitting the applications in Form 501 and if it is noticed
1
that the returns are not filed as per the periodicity, in such case
the dealer should be asked to submit the revised returns as per
the correct periodicity and also the new application in Form 501 .
Only those cases wherein the claim of refund remains unaltered
shall be eligible for pre audit refund as per this circular. No fresh
annexure will be required if the contents of the earlier annexure
remains unaltered. This action on the part of the dealer should
have been completed on or before 19th March 2008.
ςΙΙΙ. The completed Form 502 should be submitted to R.P.O. section for
issue of Refund Payment Orders. All the actions of granting
refund in the above mentioned cases should be completed on or
before 25th March, 2008.
3). POST “ GRANT OF REFUND” ACTIONS / REFUND AUDIT
After grant of refund all the cases be audited as per
principles laid down hereunder.
I. Desk Audit :- If the refund claim is less than Rs. 5 lakh per Form 501 ,
then only desk audit is to be done (No field visits.). The desk audit is
to be conducted immediately after the grant of refund. The desk
audit is to be completed in the following manner.
a) The copies of Form 704 to be obtained from Business Audit
Branch .( If available)
b) The
refund
granting
officer
should
first
ascertain
from
‘MAHAVIKAS’ the position regarding the filing of returns by all
the suppliers of the refund claiming dealer.
c) While checking, the audit officer must check that the turnover of
sales and the taxes paid by the supplier are enough to cover the
claim of ITC of the refund claimant in respect of that supplier.
d) In cases, where the dealer has effected Interstate Sales, the details
of availability of declarations under CST Act should be checked
1
by calling the dealer with details and pass the appropriate order
accordingly (wherever necessary).
e) Visit is not necessary in these cases unless there are special
circumstances due to which visit is found necessary. For this
approval of JC concerned should be taken.
II. Field Audit
:- The Field Audit is to be conducted in all the cases
wherein the refund claim is Rs. 5 lakh or more.
4 ) CROSS CHECKING OF THE TRANSACTIONS :While conducting the Desk Audit or the Field Audit, the cross
checks to be done in the following mannerΙ. The officer should confirm filing of returns by all the suppliers of the
refund claiming dealer from the MAHAVIKAS and from Return
Branch.
ΙΙ. For the purpose of cross checking, where total ITC claim in respect
of a supplier is of Rs. 50,000/- and above and where return has been
filed, 10 % of suppliers will be selected by way of Random Sampling
Method (duly approved by the concerned JC) and to be sent for cross
checking to the cross check section .
ΙΙΙ. Where ITC claims in respect of any supplier is less than Rs. 50,000/per supplier and where return has been filed , 5 % of suppliers will
be selected by way of Random Sampling Method (duly approved by
the concerned JC) and be sent for cross checking to the cross check
section
Ις. During the cross check,
if it is found that any transaction is not
accounted for by a particular supplier in his books of accounts , then
a comprehensive Business Audit of that supplier is to be taken
immediately by the Refund Audit Branch. The Cross Check Cell
should immediately inform this fact to the Refund Audit Branch.
Also, instead of the sample cross check, 100% of the cross checks of
the claimant dealer is to be issued immediately. The claimant dealer
1
should be informed about such result and reasons for issuances of
100% cross checks in his case. The claimant dealer should also be
informed if any of his suppliers is not available on the given address.
ς. It is pertinent to note here that, the information about such suppliers
should be shared with all officers through E-mail. The list of such
dealers should be prepared and monthly updating should be done by
the Cross Check Section. The information about such suppliers may
also be published on the official Web Site of the department after
canceling the R.C. of the concerned dealer to make aware the dealers
at large. If it is found during the process of cross check that the
supplier is not found at the address given, then list of such dealers
should be shared with all the officers through E–mail. The action to
cancel the TIN Certificate or Registration Certificate should be
initiated in respect of such suppliers, in due course. The details of
such suppliers should be reported to the Registration Branch to
initiate the actions of cancellation of R.C.
ςΙ. No cross checks to be issued for a single bill containing tax upto
Rs.5,000/-, Rs.4,000/- and Rs.3,000/- for the cases audited by Deputy
Commissioner, Assistant Commissioner and Sales Tax Officer
respectively .
ςΙΙ. It is needless to add that in case, any of the supplier has not filed the
relevant return, then refund to the extent of ITC claim of that supplier
should be reduced by passing appropriate order. In any case, the ITC
claim in respect of any supplier should not be granted, unless it is
verified that the supplier has filed the return for the corresponding
return period. If it is found after cross checking, that a particular
supplier is not traceable, then the refund to the extent of purchases of
such dealer should be withdrawn by passing an appropriate order.
All the departmental officers are directed to follow above instructions
scrupulously.
2
Guidelines issued vide Internal Circular bearing no. 37A, dt:
4.2
28.12.2007, are reproduced herewith,
Sub: Refunds under MVAT Act.
A) Background: The issue of pending refund claims is reviewed on 17th of
December 2007 to expedite early finalisation of refund claims. Considering the
huge pendancy, delay in completing audit, some major decisions are taken in
the public interest in the meeting related to grant of refund and audit of such
cases.
The decisions taken in the meeting should be followed by all the Joint
Commissioners (Refund and VAT-Adm) with immediate effect.
B) GRANT OF REFUND: All the cases except those are mentioned in para
(D), where the dealer has filed form 501 on or before 31st DECEMBER 2007 are
eligible for grant of balance or full refund prior to audit subject to the
following conditions:1. Form 501 must have been received on or before 31st DECEMBER 2007
2. Only cases in which refund is due as per provisions of the Maharashtra
Value Added Tax Act (MVAT Act) will be eligible for refund.
3. All Form-501 must be accompanied with annexure in proper format. If
data is huge, the department may accept this annexure in Excel format. If
Form-501 is already received and annexure is not appended, then obtain
annexure from claimant dealer within 10 days.
4. The certified copy of return in which net refund is claimed be obtained
from Returns Branch or claimant dealer. The certified copies of returns in
which refund is carried forward may also be obtained from the dealer.
5. The dealer should also certify that no sales tax dues are outstanding
against him & also that he has not carried forward the said refund in any
other subsequent return/s or previous return/s nor has adjusted it against
any of his liability.
6. It goes without saying that all the above mentioned certification must be
done by duly authorized person of the firm and should carry the stamp of
the firm & name of the authorized person
2
7. DISPOSAL: All the actions in the above mentioned cases must be
completed on or before 31st January 2008.
8. As per procedures, all cases in which Form-502 is completed, must be
submitted to RPO section for issue of RPOs.
9. All these cases will be taken up for post refund audit as per following
procedure :C) POST “GRANT OF REFUND” ACTIONS : After grant of refund all the
cases will be audited as per principles laid down hereunder:
1. Audit : The term audit refers to two stage process i.e. i) visit & detailed
scrutiny at the place of business of the claimant dealer and ii) summary audit
& cross-checking through MAHAVIKAS and/or visiting place of business of
the supplier dealers.
All the refund claims (per Form-501) above Rs 5 Lac shall be
fully audited i.e. visit, scrutiny as well as summary audit & cross checking. All
refund claims (per Form-501) of Rs 5 Lac or below shall be done through
summary audit and cross-checking only (i.e. a visit is not necessary in these
cases unless there are special circumstances due to which visit is found
necessary)
2. Procedure of Summary Audit & Cross Checking :
i) All the ITC claim will be checked for whether return has been filed
by the supplier whose invoice the ITC claim is being asked for.
ii) While checking, audit officer must check that the turnover of sales
and taxes paid by the supplier is enough to cover the claim of ITC.
iii) In all cases where return has been filed, all ITC claims of Rs 25000/& above per supplier will be sent for cross checking to the cross check
section.
iv) In ITC claims which are below Rs 25000/- per supplier for which
return have been filed, cross checking may be carried out for 5% of the
suppliers by random selection
2
v) In cases where supplier is detected as non-filer, ITC claim to that
extent be disallowed and such list be sent to Returns Branch for
appropriate action.
3. If as a result of audit it comes to notice that excess refund has been granted
to any claimant dealer, then the audit officer should immediately initiate and
pass an assessment order as per section 23 of the MVAT Act and demand so
raised shall be deducted from subsequent refund payable to the claimant
dealer. If no refund is payable subsequently, then dues shall be recovered as
per the provisions of MVAT Act.
4. In cases where declarations under CST Act are missing, assessment order
under CST Act shall be passed and necessary recovery actions shall be taken
accordingly.
D) In cases where claimant dealer is dealing in Iron & Steel and Dyes &
Chemicals, refund prior to the audit shall not be granted. In those cases,
refund shall be granted after the completion of detailed audit.
E) All the departmental officers are directed to follow above instructions
scrupulously.
4.3
4.4
Gist of other relevant Internal Circulars :1.
Internal Circular No. 2A of
2006, dt: 24.01.2006.
Instructions for issuing refund
under VAT System.
Provisional refunds to the dealers
covered under the Package
Scheme of Incentives – Timely
payment of due refunds before
31.03.006.
2.
Internal Circular No. 3A of
2006, dt: 27.01.2006.
3.
Internal Circular No. 6A of
2006, dt: 3.03.2006
Early grant of provisional refund.
4.
Internal Circular No. 5 A of
2007 Dt. 05.03.2008
Refunds under MVAT Act.
Modifications in Internal Circular
37A of 2007.
Guidelines issued vide Trade Circular bearing no.VAT/MIA1007/ADM-5/3 Mumbai, dt.23.08.2007, Trade Circular No.- 56 T of
2007, are reproduced herewith,
2
Sub: Refund under MVAT.
1. Introductory:Section 51 of the Maharashtra Value Added Tax Act, 2002 deals with
refund as per return. The corresponding Rules are, Rules 60 and 61 of the
Maharashtra Value Added Tax Rules, 2005. Till date, the refund U/s. 51 were
granted on ad-hoc basis by issuing various Trade Circulars from time to time.
This was done keeping in view that the automation and reorganization of the
department were not completed. The automation of the department is still
few months away. However, it is now decided to lay down a stable procedure
for the grant of refund.
Applicability of this Circular –
(i). The instructions contained in this circular will apply to all returns filed
before the date of this circular, (subject to making an application in Form501,) and will also be applicable for all the subsequent refund claims filed
after the date of this circular.
(ii). It is to be noted that for further grant of refund, unless a specific circular
is issued, the instructions contained in this circular would continue to apply.
The dealers should therefore follow the instructions in this circular for
claiming the refund for the subsequent periods also.
Refund and Due Returns:
i)It may be noted that refunds as per returns would be payable only in respect
of the returns which the dealer is due to file as per the rules. For example, if
a dealer is due to file a quarterly return but instead files monthly returns,
then the refund would not be granted in respect of the monthly return.
Accordingly, no refund under this circular will be allowed for a returns filed
for an incorrect period.
ii)The return should be correct, complete and self consistent. The application
in Form 501 should be consistent with the return.
2
iii) The claim of refund can be made only when the dealer is entitled to claim
it.
Application for Refunds:(i). The application for the refund is to be made in Form 501 appended to the
Maharashtra Value Added Tax Rules, 2005 (hereinafter referred to as ‘the
Rules’). For dealers situated in Mumbai, the application is to be made to the
Officer-in-charge of VAT Refunds (Joint Commissioner, Refunds), Vikrikar
Bhavan, Mazgaon, Mumbai-400 010. For dealers situated outside Mumbai,
the application should, at present, be made to the Officer-in-charge of VAT
refunds in the jurisdictional Sales Tax Office. The Annexure to the Form 501
provides for details regarding the suppliers. The information should, as far
as possible, be provided in both hard copy as well as a soft copy format,
which may be submitted along with the application in Form 501.
(ii). As per Rule 60 of the MVAT Rule 2005 the applicant has to make an
application in Form 501 to the refund granting authority. There could be
cases wherein the dealer has filed a return claiming the refund but an
application in Form 501 is not made to the refund granting authority. In all
such cases, the dealers are now required to make an application to the
concerned refund granting authority along with self attested copies of the
return claiming the refund. In order to expedite the process of grant of
Refund, the application should be made in Form 501.
Additional Information:Section 51 of the Act authorises the departmental authorities to ask for
additional information (other than that provided in Form 501) before grant of
refund under section 51. The departmental authorities may, at their option,
depending upon the individual case, decide to either conduct a refund audit
or call for additional information or grant a refund without calling for any
additional information. The refund granting authority, with approval of the
concerned Jt. Commissioner of Sales Tax, may ask for a bank guarantee for
grant of refund when the Refund is being given without Refund Audit.
Refund for financial year 2005-06:-
2
(i)
The refund for the financial year 2005-06 in case of dealers who have
filed the return alongwith form 501 before the issue of this circular shall be
granted on or before 31st October, 2007, if the applicant fulfills the other
conditions of this circular.
(ii)
There could be cases for the year 2005-06 wherein only part of the
refund is granted till date and the balance refund is pending due to various
reasons. In all such cases also the balance refund shall be granted on or before
31st October, 2007, if the applicant fulfills the other conditions of this circular.
Grant of Refund:(i). The refund of dealers U/s. 8(3) of MVAT Act shall be granted within 30
days from the date of making the application or from the date of filing the
necessary details as may be required by the refund authority, whichever is
later, provided the claim of refund is made alongwith the application in
Form 501 filed with the respective refund branch.
(ii). The dealers holding a certificate of entitlement under the package
scheme of incentive shall be granted a refund within a period of three
months from the date of application in Form 501 or from the date of
submitting the necessary details to refund authority, whichever is later.
(iii). In case of a P.S.I. dealer who holds the entitlement certificate for part of
an industrial undertaking through investment in a expansion unit and
whose production from the old and expansion investments is identifiable,
(i.e. production facilities are separate), then in such cases, the refund will be
granted only in respect of purchases corresponding to the production of the
expansion unit in the total production. Cases in which the investment in
expansion unit does not result in identifiable (separate) production capacity
but strengthens/upgrades the existing technology,
product quality or
quantity, purchases entitled for refund shall be worked out in proportion to
the new (PSI) investment in the total investment.
(iv). In all cases other than the above mentioned cases the refund will be
granted within 3 months from the date of making the application in Form
501/or from the date of submitting the details, whichever is later.
2
(v). There could be some pending cases of refund for the year 2006-07,
wherein the entire refund claim of the dealer is pending or part of the
refund, i.e. 10% or 40% is pending, as the refund audit/cross checking of the
transactions are not completed. In all such cases, the refund will be granted
on or before 30th November, 2007.
Non availability of CST declarations:(i) There could be cases wherein a refund cannot be granted only because
all or some of the declaration under Central Sales Tax Act for any period
either [2005-06 or 2006-07] are not received by the dealer. In all such cases,
after deciding the CST payable as per Section 8 of the CST Act in respect of
unreceived declarations the balance refund will be granted as per the above
guidelines. Needless to say that the dealer will have to submit the list of
declarations received and not received alongwith the Form 501.
(ii)If after the grant of refund, the dealer receives the declarations under
the CST Act then the dealer can make a fresh application before the refund
granting authority alongwith an application in Form 501. However, no such
application will be entertained within a period of six months from the date of
order granting the refund and not more than one such application shall be
entertained by the Refund granting authority.
Bank Guarantee:(i) Following parameters will be applied to the dealers willing to
submit the B G for early refund.
Sr
No
1
2
3
4
Category of the Dealer
Result of previous
audits
Extent of Bank
Guarantee
Extent of Preaudit refund
to be issued
All Dealers
No Discrepancy in
previous FOUR audits
10 per cent
100 per cent
All Dealers
No Discrepancy in
previous three audits
15 per cent
100 per cent
All Dealers
No Discrepancy in
previous two audits
20per cent
100 per cent
Newly Registered Dealers
Not Applicable
100 per cent
100 per cent
2
Sr
No
5
6
7
8
Category of the Dealer
Dealers who have effected
interstate sales
Govt Organization and
PSU
Result of previous
audits
Extent of Preaudit refund
to be issued
i) No Discrepancy in
previous two audits
i) 50 per cent
ii) First claim
ii) 100 per cent
No discrepancies
Zero BG
Discrepancies
Zero BG
90 per cent
No B G
100 % on
same day
100% BG
100percent
Diplomatic authorities
All dealer
Extent of Bank
Guarantee
First time claim
100 per cent
100 per cent
Note:1. If dealer falls under more than one category, he should be treated in
the category with higher amount of BG.
2. Discrepancy – means the disallowance exceeding 5 per cent in the
refund audit period or Rupees one lakh whichever is less.
(ii) It may be noted that the refund against the Bank Guarantee can be given
only in those cases wherein the refund is due. The cases wherein the refund is
not due, such as, the cases covered by Para 7 (iii) of this circular or the return
not filed as per the periodicity would not be covered by this clause. And in
such cases the dealer can not claim the refund by furnishing the Bank
Guarantee. Once the Bank Guarantee is accepted, then the refund must be
granted within 3 days.
(iii) If after the “Refund Audit” no discrepancies are found, then the BG
submitted by the dealer could be released or roll-over for the further period,
at the option of the dealer.
Assessment of Refund:(i). Section 51(6)(a) of the MVAT Act 2002 provides that the dealer can not
make a claim of refund as per Section 51 of the Act, if the notice U/s. 23 is
issued. Before granting the refund, the refund granting authority may like to
obtain certain details and / or may like to conduct a refund audit. If the
dealer has not submitted the details as required by the authority or has not
2
cooperated with the officer during the course of audit or if the auditor is of
the view that the assessment of the dealer is necessary then the officer shall
issue a notice U/s. 23 of the Act and assess the dealer accordingly.
(ii). Unless, such notice U/s. 23 is issued, the refund claim of the dealer can
not be withheld and the same shall be granted as per the instructions of this
circular.
Refund Audit and cross checking:(i). In cases wherein the refund is granted prior to refund audit or after
incomplete refund audit, the audit will be completed expeditiously.
(ii). It will be the endeavor of the department to complete the refund audit
and also the cross checking of the transactions as early as possible and in
any case within the time limit prescribed above.
(iii). To facilitate the cross checking of transactions, the dealers are requested
to submit the details of sales and purchases in a electronically prescribed
format to the department as and when asked for. This will facilitate cross
checking of the transactions and will also avoid the multiple visits for cross
checking to the dealer’s place of business. This should ensure the
expeditious grant of refund.
(iv). If a particular dealer claims a refund in any return /s in a Financial
Year, he would be audited by the Refund Audit Branch only. In such case
no separate “Business Audit” would be conducted by the Business Audit
Branch. However, in all such cases the “Refund Audit Branch” would
conduct a Desk Audit at the end of the year on the basis of Audit Report in
Form 704 and may conduct the Business Audit of the same dealer with prior
approval of concern Joint Commissioner of Sales Tax.
Adjustment of refund in the subsequent period:
Although, the law provides for compulsory claiming of the refund at
the end of the Financial Year, a facility was provided by way of Trade
Circular to adjust the refund for the years 2005-06, 2006-07 in the subsequent
years return.
It is hereby clarified that, henceforth such facility for the
adjustment of refund in the subsequent financial year will not be given and
2
the dealers have to claim the refund at the end of each financial year only
without adjusting it towards the liability of the subsequent year.
Order of Refund:The refund granting authority while granting the refund should clearly
mention in refund sanctioning order in form No. 502 the following details.
Rs.
(i) Amount of refund claimed as per form No. 501 :
(ii) If Refund Audit is completed.
(a)
Amount disallowed:
(b)
Amount approved:
(-)
----------------------------------------
(iii) Refund granted earlier if any
---------------------
(iv) Refund to be granted:
----------------------
(v) Refund actually granted under this order:
----------------------
(vi) Balance refund due/withhold, if any
-----------------------
ECS of Refund:The refund claimants must submit alongwith form 501 the details of
his bank account (the name of the bank, branch and account number)
alongwith a cancelled cheque.
Those who have already submitted these
details need not submit these details again. This is to ensure the credit of
refund in the bank by way of ECS.”
4.5
1.
2.
3.
4.
5.
7.
Gist of other relevant Trade Circulars :Trade Cir.- 27 T of 2005,
Dt : 22/09/ 2005.
Refund Payment orders under the
Maharashtra Value Added Tax Act, 2002.
Trade Cir.- 33 T of 2005,
Dt : 21/10/2005.
Trade Cir- 2T of 2006, Dt :
7/1/2006.
Trade Cir- 8T of 2006, Dt:
28/02/2006.
Trade Cir-18 T of 2006 Dt:
01/08/2006.
Trade Cir-2T of 2007 Dt:
8/01/2007.
Provisional Refund : Early Refund
Provisional Refund: Early Refund:
Second Circular.
Provisional Refund: Early Refund.
Refund for the Financial Year 2005-06 and
2006-07.
Adjustment of amount of refunds under
BST Act, 1959 against dues under MVAT
3
Act,2002.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Trade Circular No. 3T of
2007 , Dt: 10.01.2007.
Trade Circular No. – 4T
of 2007, Dt. 12.01.2007.
Trade Circular No. – 14 T
of 2007, Dt. 08.02.2007.
Trade Circular No.–22T of
2007, Dt. 01.03.2007.
Refund Audit under MVAT Act.
Refund for the period from 01/04/2005
onwards.
Grant of Provisional Refund.
Grant of Refund.
Adjustment of refund of the Financial
Year 2006-07 to the Financial Year 200708.
Trade Circular No. 1T of Procedure for Issuance of Statutory Forms
2008, Dt: 25.01.2008
under Central Sales Tax Act, 1956.
Filing of correct and complete returns and
Trade Circular No. 3T of
furnishing copies of the returns to the
2008, Dt. 06/02/2008.
Sales tax authorities.
Furnishing of copies of challans / returns
Trade Circular No. 5T of
to the Sales Tax Authorities.
2008, Dt. 28/02/2008.
Trade Circular No.–41T of
2007, Dt. 21.05.2007.
Trade Circular No. 6T of Grant of Refunds : Bank Guarantee
2008, Dt. 01/03/2008.
5. COMPETENT AUTHORITIES & TARGETS:5.1
The competent authorities to process / audit and authorize the cases
are as follows:-
Processing / auditing
Officer
Sales Tax Officer
Authorising Officer
Dy. Commissioner
Assistant Commissioner Dy. Commissioner
Dy. Commissioner
5.2
Joint Commissioner
Amount of refund claim
Below Rs. 3.5 lakh
Above Rs. 3.5 lakh upto
Rs. 10 lakh
Above Rs. 10 lakh
The competent authority to issue RPO & Advice Notes:Amount of refund
Competent authority to issue RPOs /
Advice Notes
3
Equal to or less than Rs. 5 lakh
Asstt. Commissioner
Above Rs. 5 lakh to Rs. 25 lakh
Dy. Commissioner
Above Rs. 25 lakh
Joint Commissioner
5.3
TARGETS:-
Sr.
No.
Designation
Unit’s
Sanctioned
strength
Target per
month
Individual
Target per
annum
Unit
Individual
Unit
1
D.C.
8
8
64
80
640
2
A.C.
26(24+2)
11
264
110
2640
3
STO
16 (8+8)
15
120
150
1200
Total
256
448
6. THE PROCESS IN BRIEF:-
3
4480
Refund claim in form 501 received in the office of JCST of R&RA.
Acceptance on MAHAVIKAS & entry in Centralised Register.
Refund claim in form 501
against Bank Guarantee.
Refund claim in form 501
without Bank Guarantee.
Custody of BG and BG
Acceptance Order to be
passed by Designated
Officer in the office of
JC R&RA
Allotment to concerned
DC Unit
Allotment to concerned
DC Unit.
Sub-Allotment to DC / AC /
STO
Sub-Allotment to DC/AC/STO
Visit to dealer & verification
of books of accounts.
Claims processed with
Bank Guarantee.
* * (Follow the
procedure except issue
of Form 502).
Issue Cross-checks to
Cross-check cell.
As per Audit findings,
variation in Refund
Claim.
As per Audit findings,
confirmation of Refund
claim.
Amend the claim by
Revised Return /
Acceptance Letter.
Authorisation of claim by
Refund
Authorising
Officer.
If dealer disagreethen notice in
Form 301 to be
issued.
Authorisation of claim by
Refund
Authorising
Officer.
Issue Audit Form 6
Assessment order in
Form 303 to be issued.
Issue RSO Form 502.
Reconciliation of
paid Advice Notes
received from RBI by
Designated Officer in
the office of JC
R&RA.
RPO issued by RPO Signing
Order
resulting in
Refund
Order
resulting in
Dues
Authority
Update Centralised
Master File.
7. PROCEDURE OF BRANCH:-
3
Send recovery to
Recovery Branch.
7.1
Fast Track Window
for acceptance of return wherein refund is claimed :7.1.1
The returns of claimant dealers shall be accepted at Fast Track
Window specially created for this purpose.
7.1.2
After acceptance, such returns will be photo copied by the
Refund & Refund Audit Branch and such photo copies are to be
retained with the Branch.
7.1.3
The photocopy of the return is to be certified by the AC / STO
(in-charge for return acceptance) & such certified copies of
return will be forwarded to the concerned unit dealing the case.
7.1.4
Thereafter, original return will be sent back to the concern
authority of the Return Branch, within 7 days and receipt for the
same, to be obtained.
7.1.5
Returns filed up to 20.06.2006:- In some cases, it has been
observed that, dealers who have filed returns up to 20.06.06
have not applied for refund in Form-501. To claim the refund, it
has been made mandatory to file application in form 501, w. e. f.
20.06.2006. Hence, in such cases, the courtesy letter is to be
issued and if dealer failed to apply in Form 501, then assessment
should be initiated and necessary actions to be taken.
7.2
Single Window System
for acceptance of Application for Refund in Form 501 :7.2.1
The application for refund in Form 501 is to be accepted, in the
office of the Joint Commissioner of Sales Tax, Refund & Refund
Audit Branch, where the Single Window System for acceptance
is introduced.
7.2.1
The Officer in-charge for acceptance of Application for Refund
in Form 501, shall keep ready the checklist for documents
required to be submitted along with application for refund in
3
Form 501 and such checklist is required to be displayed near
Single Window System.
7.2.2
The Sales Tax Inspector shall face-check the application for
refund in Form 501 along with return and documents,
submitted by the dealer. And only correct & complete
applications will be accepted.
7.2.3
In case of incorrect and / or incomplete and / or defective
application for refund in Form 501, the Officer in-charge shall
issue duly signed letter, narrating the reason / reasons for nonacceptance of such application.
7.2.4
The receipt for an application for refund in Form 501 is to be
generated through the MAHAVIKAS System. In exceptional
cases, the concerned staff person at the Single Window System
shall record the reason / reasons on the application itself, for
non generation of receipt through MAHAVIKAS System.
7.2.5
The applications for refund in Form 501 received from dealers of
the category of Large Taxpayer’s Unit (LTU) are to be forwarded
to Large Taxpayer’s Unit, for further actions. For this purpose,
the Officer in-charge should keep the list of dealers of such
category.
7.2.6
The entry of applications for refund in Form 501 is to be taken in
Centralised Register No. R&RA-1 (format enclosed), in the
office of the Joint Commissioner.
7.3
Acceptance and custody of Bank Guarantee :7.3.1
If correct & complete application is received from the dealer
claiming refund against Bank Guarantee and the Bank
Guarantee furnished is in the prescribed format as notified by
the Commissioner for the prescribed amount and period, then,
7.3.2
The details of such Bank guarantee furnished by the dealer
should be entered in the Bank Guarantee Register (Reg. No.
R&RA-5)
3
7.3.3
The register of Bank Guarantee (Reg. No. R&RA-5) is to be
maintained in the Office of the Joint Commissioner.
7.3.4
An Officer has to be designated and the custody of such bank
guarantees should be assigned to him.
7.3.5
The Bank Guarantees for higher amounts have to be
authenticated from the concerned Banks.
7.3.6
For this purpose, the Designated Officer shall issue letter to the
Manager or Officer In-charge of the Branch / Bank, requesting
him to affirm the facts related to said Bank Guarantee such as
amount and period, as enumerated in the said Bank Guarantee.
7.3.7
The Designated Officer shall carry out the work related to
release or roll over of such bank guarantees after results of
refund audit relevant to said refund claims, as per the dealer’s
desire.
7.3.8
The Designated Officer shall keep the status and follow up of
cases wherein Bank Guarantee has been accepted.
7.3.9
JCST, R&RA should keep follow up and ensure that, refund
audit to be expedited in such cases, where period of the said
Bank Guarantee is likely to be expired.
7.4
Allotment of cases within the Division:7.4.1
The correct & complete applications shall be allotted to the
respective unit by the Joint Commissioner.
7.4.2
Certain cases are to be retained with the Designated Officer in
the office of JCST, R&RA for such processing of refund claims
such as,
(i) claims of miscellaneous refund,
(ii) refund claims pertaining to dealers of Non Resident Circle
category,
(iii) refund claims pertaining to un-registered dealers i.e. in case of
TDS etc.
3
(iv) and refund claims pertaining to last return in respect of
cancellation of Certificate of Registration etc.
7.4.3
Through the MAHAVIKAS system, applications pertaining to
the category of SEZ dealers covered under section 8(3) of the
Maharashtra Value Added Tax Act, 2002, will be forwarded to
the unit designated for such category of the dealers, for
processing of refund claims.
7.4.4
In case of other category dealers, applications will be distributed
to different units through the MAHAVIKAS system,
7.4.5
The allotment of cases is to be done on the basis of TIN.
7.4.6
The JCST R&RA may reallocate or transfer the cases within the
units, depending on the work load with each unit.
7.5
Allotment of cases within the Unit :7.5.1
On receipt of cases from the office of JCST, R&RA, all such cases
have to be entered in Unit wise Register for Acceptance of Form
-501 (Register No. R&RA-2), for this purpose, each unit should
maintain the said Register.
7.5.2
Intra unit allotment of cases is to be done by the DCST, R&RA,
as per following slabs:Amount of refund claimed
Designation of
per form 501
Refund
Processing
Authority
7.5.3
Above Rs. 10 lakhs
Dy. Commissioner
Rs. 3.51 to 10 lakhs
Asstt. Commissioner
Below Rs. 3.5 lakhs
Sales Tax Officer
In exceptional cases, the changes in aforesaid slab will be done
by DCST, R&RA with prior approval of JCST, R&RA.
7.5.4
Cases shall be distributed to different authorities within the unit
through the MAHAVIKAS system,
3
7.5.5
As far as possible, DCST, R&RA should ensure that, various
refund claims made by the dealer within one financial year are
to be allotted to same authority.
7.5.6
Processing of refund claims should be done as per the
procedure laid down hereinafter.
7.5
Processing of Refund Claims made against Bank Guarantee :7.5.1
Procedure for grant of refund, is to be followed as per the
guidelines issued vide Trade Circular No. VAT/MIA1007/ADM-5/3 Trade Circular No. 56T of 2007 dt. 23.08.2007.
(Refer page No. 25)
7.5.2
Such refund claims are to be processed on priority basis and
refund has to be granted within three days, as per the guidelines
issued vide para 9(iii) of the Trade Circular 56T of 2007 dated
23/08/2007.
7.5.3
The
Refund
Processing
Authority
shall
submit
refund
processing report to the Refund Authorising Authority, for
authorisation of such claim.
7.5.4
After authorisation, the concerned Refund Processing Authority
shall pass Refund Sanctioning Order in Form 502.
7.5.5
Entry of Refund Sanctioning Order in Form 502 shall be taken in
a Refund Sanction Order Register (Reg. No. R&RA-4).
7.5.6
Thereafter, proposal for issue of Refund Payment Order
(Annexure - B) should be forwarded / submitted to the
concerned RPO signing authority (ACST R&RA /DCST R&RA
/JCST R&RA as per the prescribed limit).
7.5.7
After grant of refund, the claim is to be audited by the
concerned officer, as per the procedure laid down in chapter 8 of
the Manual,
7.5.8
The concerned authority should ensure that, the refund audit
procedure should be completed within the prescribed period of
the said Bank Guarantee,
3
7.5.9
The proposal for adjustment of Bank Guarantee towards dues
raised on account of excess grant of refund if any, is to be
submitted to the office of JCST, R&RA,
7.5.10 After completion of Refund Audit procedure, the proposal for
release or roll over of the Bank Guarantee as per the dealer’s
desire, is to be submitted to the office of JCST, R&RA.
7.6
Processing of refund claims made without Bank Guarantee :7.6.1
The Refund Processing Authorities should ensure that, the
actions regarding the processing of refund claims should be
initiated on FIFO basis, i.e. in order of the date of receipt of
application for refund in form 501,
7.6.2
Immediate face-checking of the return including revised return,
if any and application in Form 501 should be done by the
Refund Processing Authority with respect to the periodicity of
return, eligibility of refund as per the return in relation to
provisions of the Act / Rule i.e. whether the dealer is entitled for
refund as per the periodic return or at the end of year.
7.6.3
On face checking of return if it is found that, there is defect in
the return; take necessary steps to intimate the same to the
dealer and request him to correct the same and to file fresh
application for refund in form 501 accordingly. The copy of such
intimation should be forwarded to the concerned authority of
Return Branch, for necessary actions.
7.6.4
In case of refund claims made without bank guarantee,
procedure for grant of refund is to be followed as per the
guidelines issued vide Internal Circular No. VAT-2007/Adm7/Refund & Refund Audit/B- 503 Mumbai, dt: 28.12.2007
Internal Circular No. 37 A of 2007.
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8.
REFUND AUDIT PROCEDURE :-
Vide Internal Circular No. 37 A of 2007, it is stated that,
The term audit refers to two stage process i.e.
i) visit & detailed scrutiny at the place of business of the
claimant dealer and
ii) summary audit & cross-checking through MAHAVIKAS
and/or visiting place of business of the supplier dealers.
Vide Internal Circular No. 5 A of 2008, it is stated that,
After grant of refund all the cases be audited as per principles laid
down hereunder.
Ι. Desk Audit :- If the refund claim is less than Rs. 5 lakh per Form
501 , then only desk audit is to be done (No field visits.). The desk
audit is to be conducted immediately after the grant of refund. The
desk audit is to be completed in the following manner.
a) The copies of Form 704 to be obtained from Business Audit
Branch .( If available)
b) The refund granting officer should first ascertain from
‘MAHAVIKAS’ the position regarding the filing of returns
by all the suppliers of the refund claiming dealer.
c) While checking, the audit officer must check that the
turnover of sales and the taxes paid by the supplier are
enough to cover the claim of ITC of the refund claimant in
respect of that supplier.
d) In cases, where the dealer has effected Interstate Sales, the
details of availability of declarations under CST Act should
be checked by calling the dealer with details and pass the
appropriate order accordingly (wherever necessary).
e) visit is not necessary in these cases unless there are special
circumstances due to which visit is found necessary. For this
approval of JC concerned should be taken.
4
II. Field Audit
:- The Field Audit is to be conducted in all the cases
wherein the refund claim is Rs. 5 lakh or more.
8.1
A.
Appointment for the visit:-
8.1.1
The respective Refund Processing Officer will conduct the visit
and carry out the audit of the refund claim.
8.1.2
Take the appointment of the dealer for audit by issuing a notice
u/s 22 (format attached at Annexure-A) and plan should be
chalked out accordingly. An enclosure should be attached,
requesting the dealer to keep ready the specific details regarding
sales and purchases and their summary etc.
8.1.3
Before proceeding on visit, the Refund Processing Authority
should take entry in the Visit Register maintained in the Office
of JCST, R&RA.
8.1.4
Details regarding visit viz. name and address of dealer, contact
telephone nos. should be filled and signatures of immediate
Administrative Authority should be taken against such entry.
8.2
B.
Pre-visit scrutiny & checks :-
8.2.1
The Refund Processing Authority shall see details of the dealer
regarding Certificate of Registration from the MAHAVIKAS
System viz. nature of business, commodity dealt, details of POB,
POR and additional POB etc.,
8.2.2
The Refund Processing Authority shall carry out scrutiny of
annexure submitted by the dealer, in respect to various inputs
received from the Investigation Branch or Return Branch or
from any other Branches, if any.
8.2.3
The purpose is that, during the course of visit, it would be
useful for the Authority to gather essential and requisite
evidences, to initiate necessary actions against the dealer under
the audit.
8.2.4
The compilation of returns should be done, especially when the
dealer has brought forward refund from previous period /
4
periods. Then in such cases, the refund audit should be carried
out from the period, from where the refund has been brought
forwarded.
8.2.5
The Refund Processing Authority shall prepare summary, short
notes regarding sales transactions eligible and ineligible to tax
and claims on purchase side at different tax slabs,
8.3
C.
During the visit scrutiny & checks :-
8.3.1
Record the particulars of visit i.e. date of visit, time of entry and
place of visit etc.,
8.3.2
While initiating the audit, carry out brief interview with the
authorised person regarding nature of business, business
process, commodity dealt, inputs, intermediates and outputs
and their ratio,
8.3.3
If there are any changes in the registration details, are to be
communicated to the Registration Branch accordingly,
8.3.4
Record particulars regarding the books of accounts / documents
produced by the dealer and verified,
8.3.5
Inspect the business premises / factory / warehouse, etc. to
ascertain the equipment / capital goods in use, inputs and the
outputs of the dealer.
8.3.6 Details regarding inputs, to be verified :i. Reconciliation of turnover of purchase as per ledger,
register and return,
ii. Verify purchases effected by the dealer from Registered
Dealers, Un-registered Dealers, interstate, imports & high
seas etc and
iii. Verify all tax invoices against which the dealer have
claimed Input Tax Credit (ITC),
iv. Record particulars regarding the commodities purchased
i.e. inputs against each tax rate,
4
v. As far as possible, record the Central Excise Tariff Heads of
inputs, especially in case of Excisable Units.
vi. ITC claimed at different tax rates is to be verified and total
ITC claimed tax slab wise is to be compiled and same to be
reconciled with the return ITC claimed.
vii. Verify the details regarding goods held in stock as on 1st
April 2005 such as tax paid separately invoices and tax
inclusive invoices and whether such goods are sold prior to
31st December 2005,
viii. Verify details regarding purchases made against various
declarations,
ix. In certain cases like Pharmaceutical Dealers, DPCO and
non-DPCO medicines are to be segregated and summary to
be prepared,
x. Identify and ascertain amount of reduction to be made on
account of rule 53,
xi. Identify and ascertain amount of ITC not admissible on
account of rule 54,
xii. Verify claims regarding goods return, discounts and
Dr./Cr. Notes.
xiii. Verify the Branch Transfers / Consignment transfers in, if
any.
xiv. A list of purchases party-wise / bill wise / date wise to be
taken on record, as far as possible such list should be taken
in electronic form i.e. MS Excel format, this will facilitate
the cross checking procedure contemplating the return
verification through MAHAVIKAS System,
xv. Additional checks such as bank statements for evidence of
payments, stock on hand and capital goods and its delivery
records may be verified and taken on record, if necessary.
4
xvi. In case of purchase of Capital Goods, verify the tax invoice,
physical examination of goods whether such goods exist or
disposed off.
xvii. In case of a P.S.I. dealer who holds the entitlement
certificate for part of an industrial undertaking through
investment in a expansion unit and whose production from
the old and expansion investments is identifiable, (i.e.
production facilities are separate), then in such cases, the
refund will be granted only in respect of purchases
corresponding to the production of the expansion unit in
the total production. Cases in which the investment in
expansion unit does not result in identifiable (separate)
production capacity but strengthens / upgrades the
existing
technology,
product
quality
or
quantity,
purchases entitled for refund shall be worked out in
proportion to the new (PSI) investment in the total
investment.
8.3.7
Details regarding outputs, to be verified:i. Reconciliation of turnover of sales as per ledger, register and
return,
ii. Record particulars regarding the commodities sold i.e.
outputs against each tax rate,
iii. As far as possible, record the Central Excise Tariff Heads of
outputs, especially in case of Excisable Units.
iv. Sales shown at different tax rates is to be verified and total
VAT payable as per tax slab wise is to be compiled and same
to be reconciled with figures shown in the return.
v. In certain cases like Pharmaceutical Dealers, DPCO and nonDPCO medicines are to be segregated and summary to be
prepared,
4
vi. Identify and ascertain amount of VAT payable on account of
sale of fixed asset or capital goods,
xviii. Verify claims regarding goods return, discounts and
Dr./Cr. Notes.
vii. Verify the Branch Transfers / Consignment transfers, if any
viii. Verify and record details regarding tax free sales and job
work charges received.
ix.
Verify interstate sales shown against declarations and list
out declaration received and not received, if any.
x. In case of Exporter, verify the documents viz.
i. commercial evidence of export,
ii. copy of custom clearance certificate,
iii. contract with foreign buyer,
iv. evidence of export (bill of lading / airway bill), etc.
v. evidence of payment for the goods or a letter of credit.
(Note that, all above details are illustrative in nature and are not exhaustive,
depending upon the fact and necessity of the case the Auditing Officer should apply
his mind).
8.4
D.
Concluding the visit:-
8.4.1
Prepare the summary of transactions relevant to the period.
8.4.2
Prepare summary / verification report in the view of Audit
Form 5.
8.4.3
The documents & statements to be taken at the time of visit and
to be kept on record are given in Annexure-C
8. Before concluding the visit, the Refund Audit Officer should
obtain signature of the dealer on the proceedings, narrating
the facts of visits and additional requirement to be furnished
and intimating the date on or before which he has to comply
the same etc.
4
8.5
Submission of preliminary visit report:8.5.1
Refund Processing / Auditing Officer should immediately
prepare a preliminary visit report envisaging the details of visit
and the same should be submitted for perusal, to the Refund
Authorising Officer, as per the slabs set right vide para 5.1 of the
manual.
8.5.2
Along with preliminary submission, a visit report in Form No.
R&RA-5 is to be prepared by the Refund Processing / Auditing
Authority and the same should be submitted for perusal, to the
Refund Authorising Officer.
8.6
CROSS CHECKS:8.6.1
In order to verify genuineness of the ITC claimed by the dealer,
it is required to check the tax liability and payment of tax of the
vendors.
8.6.2
For this purpose cross checks are to be issued to Cross check
Unit.
8.6.3
The details regarding the cross checks issued, are to be entered
in the Cross Check Register (Reg.No.R&RA-3).
8.6.4
The procedure for cross checking is to be followed as per
guidelines issued vide Internal Circular 6A of 2008 dated
12/03/2008, which reproduced herewith,
While conducting the Desk Audit or the Field Audit, the cross
checks to be done in the following mannerΙ. The officer should confirm filing of returns by all the suppliers
of the refund claiming dealer from the MAHAVIKAS and
from Return Branch.
ΙΙ. For the purpose of cross checking, where total ITC claim in
respect of a supplier is of Rs. 50,000/- and above and where
return has been filed, 10 % of suppliers will be selected by
way of Random Sampling Method (duly approved by the
4
concerned JC) and to be sent for cross checking to the cross
check section .
ΙΙΙ. Where ITC claims in respect of any supplier is less than Rs.
50,000/- per supplier and where return has been filed , 5 % of
suppliers will be selected by way of Random Sampling
Method (duly approved by the concerned JC) and be sent for
cross checking to the cross check section
Ις. During the cross check, if it is found that any transaction is
not accounted for by a particular supplier in his books of
accounts , then a comprehensive Business Audit of that
supplier is to be taken immediately by the Refund Audit
Branch. The Cross Check Cell should immediately inform this
fact to the Refund Audit Branch. Also, instead of the sample
cross check, 100% of the cross checks of the claimant dealer is
to be issued immediately.
The claimant dealer should be
informed about such result and reasons for issuances of 100%
cross checks in his case. The claimant dealer should also be
informed if any of his suppliers is not available on the given
address.
ς. It is pertinent to note here that, the information about such
suppliers should be shared with all officers through E-mail.
The list of such dealers should be prepared and monthly
updating should be done by the Cross Check Section. The
information about such suppliers may also be published on
the official Web Site of the department after canceling the R.C.
of the concerned dealer to make aware the dealers at large. If it
is found during the process of cross check that the supplier is
not found at the address given , then list of such dealers
should be shared with all the officers through E–mail . The
action to cancel the TIN Certificate or Registration Certificate
should be initiated in respect of such suppliers, in due course.
4
The details of such suppliers should be reported to the
Registration Branch to initiate the actions of cancellation of
R.C.
ςΙ. No cross checks to be issued for a single bill containing tax up
o Rs.5,000/-, Rs.4,000/- and Rs.3,000/- for the cases audited
by Deputy Commissioner, Assistant Commissioner and Sales
Tax Officer respectively .
ςΙΙ. It is needless to add that in case, any of the supplier has not
filed the relevant return, then refund to the extent of ITC claim
of that supplier should be reduced by passing appropriate
order. In any case, the ITC claim in respect of any supplier
should not be granted, unless it is verified that the supplier
has filed the return for the corresponding return period. If it is
found after cross checking, that a particular supplier is not
traceable, then the refund to the extent of purchases of such
dealer should be withdrawn by passing an appropriate order.
8.6.5
On receiving the results of Cross–checks, the corresponding
entry in the Register No. R&RA-3 is to be rounded and follow
up should be made for the un-received cross checks.
8.6.6
In case, where the cross checks of supplier resulted in nonconfirmation of ITC claim, then show cause notice for citing the
provisions of sub-section 48(5) should be served on the dealer
and after affording reasonable opportunity of hearing, such ITC
reductions are to be made from the refund claim.
8.7
CONCLUDING THE AUDIT :8.7.1
Auditing Officer shall keep on record documents & statements
as enlisted in Annexure-C, which are submitted by the dealer at
the time of visit and during the Refund Audit proceedings.
8.7.2
On receipt of total results of cross checks, it is required to
summarise the same and such summary should be kept on
record.
4
8.7.3
The summary of sales and purchases relevant to the said period
is to be prepared i.e. VAT payable, ITC eligible, Tax liability
under the CST Act etc. and it’s reconciliation with the details
disclosed as per the return / returns, is to be made.
8.7.4
A proposal highlighting the effect in totality should be prepared
by the Auditing Officer.
8.7.5
The Refund Audit may result in two types of contingencies :(I)
Refund Audit resulted in confirmation of the
refund claim,
(II)
Refund Audit resulted in variation of the refund
claim.
8.8
Refund Audit resulted in confirmation of the refund claim :8.8.1
Submit the case for authorisation of the claim along with Audit
Form No.R&RA-6 duly signed by the Refund Processing
Authority.
8.8.2
Refund Authorising Authority should scrutinise the proposal
submitted and should note his remarks if any and if the
proposal is found to be correct and in order, then authorise the
proposal and should sign on Audit Form No.R&RA-6.
8.8.3
After the claim has been authorised, the concerned Refund
Processing Authority should pass the Refund Sanctioning Order
in Form 502.
8.8.4
Entry of Refund Sanctioning Order in Form 502 shall be taken in
a Refund Sanction Order Register (Reg. No. R&RA-4).
8.8.5
Thereafter, the proposal for issue of Refund Payment Order
(Annexure - B) should be forwarded / submitted to the
concerned RPO signing authority (ACST R&RA /DCST R&RA
/JCST R&RA as per the prescribed limit).
Refund Audit resulted in variation of the refund claim :
1.9.
Appropriate corrective actions will be initiated by the
auditor. If the dealer accepts the auditor’s findings, then he
4
may file revised return or may submit acceptance letter or
may sign the proceeding sheet to that effect.
2.9.
Then, the Refund Processing Authority shall follow the
procedure as laid down vide earlier paras 8.7.1 to 8.7.5.
3.9.
In case of the second possibility, if the dealer does not accept
the auditor’s findings, then the auditor will issue a notice for
assessment in Form 301 u/s. 23 of Maharashtra Value Added
Tax Act, 2002 to assess the dealer.
4.9.
In such situation the Refund Processing Authority shall close
the entry of such application for refund in form 501. Since, if
at all the assessment proceedings result in refund, then the
refund would be processed under section 23 and not under
section 51 of the Maharashtra Value Added Tax Act, 2002.
PROCEDURE FOR ISSUE OF REFUND PAYMENT ORDER :
1.10.
The procedure is laid down vide Internal Circular No.
Circular No. 2A of 2006 dt: 24.01.2006, and certain
instructions are reproduced herewith,
2.10.
The proposal for issue of Refund Payment Order in duplicate
should be sent in the prescribed format. (format attached at
Annexure –B)
3.10.
Outstanding dues, if any in respect of any other period shall
first be adjusted to arrive at the net refundable amount and a
copy of the Refund Adjustment Order (RAO) shall be
endorsed to the Recovery Branch.
4.10.
Entry should be taken in Refund Proposal Register No.
R&RA-6, maintained by each unit.
5.10.
After audit, the list of RPO issued is to be sent to the Return
Branch for endorsement on original return and update the
record.
5
6.10.
The return
branch officer will make the necessary
endorsement on the original return on the basis of the list
received by him and update records.
7.10.
The Return Branch officer will acknowledge the list received
by him.
8.10.
The authority issuing the R.P.O. should maintain a register,
viz., Refund Payment Register (R&RA-7). He should make a
note of R.P.O. number and advice note number in the refund
file, should keep a record of the dealers to whom the R.P.Os.
have been issued by them along with their registration
number and address.
9.10.
The authority issuing R.P.O. will also issue advice notes to
the banks simultaneously. Caution should, however, be
taken to ensure that the advice note should reach the banks
before the R.P.O is presented by the dealers’ bank to the
Reserve Bank of India or State Bank of India for payment.
10.10.
Custody and account of RPO and advice notes. — The books
of the refund payment orders and the advice notes should
remain in the personal custody of the officers who are to
issue the refund payment orders.
11.10.
Accounts of stationery of RPO books and advice note
books. -- The R.P.O. books and advice note books will
hereafter be issued by the stationery cell to the respective
Joint Commissioners. On receipt thereof, an entry of the
book numbers along with voucher numbers therein should
be kept in a register to be maintained for this purpose by the
concerned Joint Commissioner.
12.10.
This register and the RPO books / advice note books should
invariably figure in the charge report whenever there is a
change of officer holding the job. It would be in the interest
of the officers themselves to take a receipt from their
5
successor of having handed over the RPO books (both used
and unused), advice note books and register of accounts.
13.10.
Inspection of register of R.P. O’s and advice notes. -- During
office inspection of any of the officers issuing RPOs and
advice notes, the inspection should invariably cover
verification of the register of RPOs and advice notes to make
sure that it has been correctly and kept up to date and that
the physical stock of RPO books and advice note books tally
with the register.
14.10.
Apart from the above, the officers should carry out frequent
check of the RPOs issued, physical stock of unused forms
and uptodateness of the stock register.
15.10.
Specimen signatures of refund signing officers.-- The officers
who would hereafter be issuing the refund payment orders
and advice notes should send their specimen signatures to
the Reserve Bank of India, Mumbai, (for officers situated in
Greater Mumbai ) and to the State Bank of India/State Bank
of Hyderabad at the district headquarters/places where the
refund
payment
orders
will
ultimately
come
for
clearance/payment (for officers situated outside Greater
Mumbai ). Whenever there is a change in the incumbency of
any of these posts, the specimen signatures of the newly
appointed officer should immediately be sent to the
concerned banks as mentioned above. For Greater Mumbai,
the work of sending the specimen signatures of refund
signing authority should be centralised in the office of the
Joint Commissioner (Head Quarters-1) and in mofussil the
respective Joint Commissioner.
16.10.
Entry of R.P.0. number, date and amount.-- After an R.P.O.
has been issued by the R.P.O. Issuing Authority, entry of the
R.P.O. number, its date and the amount should invariably be
5
made in different places, namely, proceeding sheet of the file
for the relevant period; the Refund Proposal Register and
Refund Payment Register maintained by the Refund
Processing and Issuing Authority, respectively ; order in
Form 502; and the copy of the return or order kept in the
return file of the dealer.
17.10.
Scroll to be obtained from Treasury / Banks.— It is hereby
clarified that the scrolls including e-scrolls regarding the
paid R.P.O.s should be obtained from the Treasury /Banks
only, which in most of the district places would be the State
Bank of India..
18.10.
Separate R.P.O. books for each RPO issuing authority.—
For this purpose, it is suggested that the number of R.P.O.
books being used by the Joint Commissioner of Sales Tax
and the Assistant Commissioner of Sales Tax may be
communicated to the Treasury / Bank under a common
letter so that the work of Treasury / Bank for checking also
become simplified. This work should be coordinated by the
concerned Joint Commissioner.
19.10.
It is clarified that all RPOs should invariably be sent to the
dealers by the R.P.O. Issuing Authority itself under RPAD
letters.
20.10.
To prevent any misuse of these RPOs, all the RPOs should be
crossed and made A/c payee only by putting an
endorsement A/c payee only on the left hand top corner of
the R.P.O. issued. Further, the amounts should be written,
both in figures and words, in the counterfoils or office copies
apart from Refund Payment Order to be issued to the
dealers.
21.10.
The name of bank, branch and account number of dealer is to
be incorporated on the RPO to prevent misuse of RPO.
5
22.10.
The RPAD should be sent by the R.P.O. Issuing Authority
and the acknowledgement when received should be
recorded (in dispatch register in which, entry of RPAD has
been kept)
23.10.
Advice Notes.— The advice notes should reach the treasury
/ bank before the dealer presents the R.P.O. for payment and
there should be no occasion for treasury / bank to dishonor
the R.P.O.s only because advice note is not received in time.
For Greater Mumbai alone, Reserve Bank of India has
desired to give a code No. to each R.P.O. Issuing Authority
to facilitate easier verification of signatures on the R.P.O.s
with the specimen signatures. Code Nos. are based on the
post. Code numbers for the posts of various R.P.O. Issuing
Authorities have been separately communicated to the Joint
Commissioner, Refund & Refund Audit, Mumbai and they
have also been orally instructed as to the manner in which
the specimen signature card should be filled up. For Greater
Mumbai alone, R.P.O. Issuing Authorities should also
indicate the code number along with their designation
stamp.
24.10.
Counting of R.P.O. sheets before using an R.P.O. Book —
The competent authorities issuing such Refund Payment
Orders, on receipt of Refund Payment Order Books, should
check and see that, all the forms contained in each book are
intact and no form is missing. A Certificate of the number of
Refund Payment Orders, beginning number and last
number, should be recorded on the fly leaf of each book, by
each Refund Payment Order issuing authority. The typical
format for such certificate is “certified that this R.P.O. book
contains . . . . . . . . . . . . R.P.O.s bearing distinctive numbers
from . . . . . . . . to . . . . . . . . . .”. Any other matter relating to
5
the R.P.O. may be referred to the Joint Commissioner of
Sales Tax (H.Q.-1), Maharashtra State, Mumbai.
25.10.
No re-validation of R.P.O.s –The R.P.O. should not be
revalidated and no corrections should be carried out in the
same R.P.O. Most of the R.P.O.s would not be encashed only
if they are not presented within three months from the
month of issue of R.P.O. The returned back R.P.O. should be
cancelled by making proper endorsement of cancellation on
the same. After canceling such R.P.O., it should be kept in
the record of the dealer and a note regarding cancellation
should be taken in the remarks column of Refund Proposal
Register and Refund Payment Register. A new Refund
Payment Order should be issued in lieu of the duly cancelled
R.P.O and a fresh entry should be taken in the Refund
Proposal Register and Refund Payment Register. Cross
reference of old entry as well as new entry should be taken
in the remarks column. In the remarks column of old entry
the endorsement should be “cancelled on . . . . . . . . . . . Fresh
R.P.O. issued at Sr.No . . . . .”. Similarly, in the remarks
column of the new entry, the endorsement should be “Issued
in lieu of R.P.O. at Sr. No. ”
26.10.
Necessary endorsement to that effect should also be made in
the following:
(i) proceeding sheet of the file for the relevant period;
(ii) the Movement-cum-Accounts Register maintained by the
Refund Processing and Issuing Authority respectively in the
format given in
(iii) order in Form 502; and the copy of the return or order
kept in the return file of the dealer.
27.10.
Partly used R.P.O. Books.— Partly used R.P.O. books
containing some blank R.P.O. vouchers should not be used
5
for issue of R.P.O. to the dealers. Unused R.P.O. vouchers in
such books should be cancelled and such books along with
the used R.P.O. books should be returned to the respective
Joint Commissioner. While doing so, a list of R.P.O. books
showing the Sr. No. of vouchers therein should be prepared.
The respective Jt. Commissioner should, in turn, prepare a
list for his division and send these R.P.O. books (both fully
used and also partly used) to the Jt. Commissioner (H.Q.-1) ,
Mumbai along with the list for safe custody.
28.10.
Reconciliation of RPOs with banks. -- It is necessary to
carry out periodic reconciliation of the Advice Notes issued
by the various officers and payments as recorded in the bank
(paid Advice Notes). For this purpose, the periodicity of
reconciliation should be a three calendar months i.e. all the
scrolls received for a particular three calendar months
should be examined together. Cases of over payment, if any,
should be immediately investigated.
29.10.
The dedicated officer of Pay & Accounts cadre may be
assigned these works. It shall be ensured that the officer
issuing cheque and officer carrying reconciliation shall be
different one.
30.10.
To reconcile the paid Advice notes received from Reserve
Bank of India / Treasury, is to be carried out by the
Designated Officer in the office of JCST R&RA.
31.10.
Reconciliation of paid advice notes and relevant record
pertaining to the refund claim, is to be verified and
reconciled from following authorities.
Amount
as per
paid
Advice
Notes
Refund Processing
Authority
5
Refund Signing
Authority
Below 5
Lacs
Below 25
Lacs
Above 25
Lacs
POST AUDIT ACTIONS:-
Sales Tax Officer,
Asstt. Commissioner
Asstt. Commissioner
Deputy Commissioner
Deputy Commissioner
Asstt. Commissioner
Deputy
Commissioner
Joint Commissioner
1.11.Power To Withhold Refund:If the order giving rise to a refund is the subject matter of an
appeal or further proceeding & the concern authority is of
opinion that giving refund may adversely affect the revenue.
2.11.Prior approval of Joint Commissioner is necessary.
3.11.Joint Commissioner shall give approval only if he is
satisfied that on the conclusion of the proceeding, it will
become necessary to recover the amount of refund in full or
part.
4.11.No order withholding the refund shall be made after the
expiry of 90 days from the date of the service of the order
giving rise to refund.
5.11.If the withheld refund is paid, interest is to be paid from
the expiry of 90 days from the order of refund to date of
refund as per prescribed rate.
Centralised Master File :1.12.The office of the JCST, R&RA is required to maintain and
update the master file.
1.12.It is necessary to maintain the centralised master file
(index file) of the individual dealer in which entry is to be
taken regarding details of Form 501 passed and position of
refunds granted to the dealer.
2.12.The centralised master file is to be kept in alphabetical
manner. The format of Index is enclosed at Annexure-D.
Desk audit :-
5
1.13.
Form 704 in refundable cases should be collected from the
Business Audit Branch, where the dealer is required to file
the same.
2.13.
Desk audit of all Form 704 in refundable cases is to be done.
3.13.
Desk audit of cases in which Form 704 is subsequently filed
by the dealer.
4.13.
Verify the correctness of the refund claim made with returns
during the period, books of accounts and Form 501.
5.13.
If any discrepancy is found, take necessary actions including
business audit of the case with prior approval of Joint
Commissioner.
6.13.
Business Audit in refund cases:- If the dealer has filed
application in Form 501 in any period of financial year, then
Refund Audit should be taken for complete financial year.
Form 704 submitted by the dealer to Business Audit Branch
is to be obtained. Desk Audit of all Form 704 is to be
undertaken in comparison with the refunds granted.
7.13.
Chapter 6 of Business Audit Manual, is reproduced here for
reference,
6.1 Note:
A separate manual has been prescribed for
Refund Audits. The case wherein the dealer has already
filed application in form 501, the audit is to be conducted by
the refund audit branch for whole of the year. The cases
which are selected for business audit and as a result of audit
it is found that the dealer stands to get a refund, that is the
case results in over declaration, in such cases the auditor
while carrying out the business audit shall also apply the
procedure prescribed for the refund audit in refund audit
manual for carrying out the refund audit and thereafter
completing the procedure and coming to the conclusion in
the matter should give such findings in audit form 7. The
5
dealer may be advised to file the revised return and on such
filing the dealer may file the prescribed form 501 with the
refund audit authorities. The refund audit branch , however
may give the refund on basis of the findings of the Auditor
issued to dealer in form Audit form 7. The refund audit
branch need not again carry out the Audit as prescribed in
their manual. The auditor of business audit branches at end
of each month should forward to his immediate superior
authority a statement in form H6 stating their in the list of
dealers ,their over-declarations, the date of findings in form
7, date of filing of revised return and a copy of findings in
form 7 issued to the dealer. These statements should be
consolidated at section level by the office of Joint
commissioner and then forwarded to the office of the Joint
Commissioner of Sales Tax Refund Audit Branch.
5
9. DUTIES & RESPONSIBILITIES :9.1
Joint Commissioner (Refunds & Refund Audit)
9.1.1
Purpose of Job
Overall management of Refund & Refund Audit ensuring that
Audit of Refund claims and sanctioning of Refund claim is
done in an effective and efficient manner.
9.1.2
Reports to:
Additional Commissioner VAT
9.1.3
Line manager for:
Deputy Commissioner (Refund & Refund Audit)
Assistant Commissioner (Refund & Refund Audit)
Assistant Commissioner (PA Section)
Sales Tax Officer
Establishment Officer
9.1.4
Main duties and accountabilities:
i. Assist the Additional Commissioner (VAT) in the formulation
of policies and objectives expeditious disposal of refund claims
in Mumbai
ii. Manage the staff of the branch, ensuring that refunds are
lessened in accordance with legal time limits and interest on
late refunds is minimized.
iii. Manage the formulation and implementation of the annual
operational plans of the branch, allocate work accordingly,
receive reports on implementation from section heads and
make monthly reports to the Additional Commissioner
summarizing progress against plans and accounting for any
variations.
iv. Maintain the prescribed registers and prepare monthly
abstracts of such registers.
6
v. Prepare an annual expenditure budget for the branch, monitor
actual expenditure and account for any variations between
actual and budgeted expenditure
vi. Ensure that standard systems and procedures are consistently
applied and observed, and that adequate security checks are in
place to prevent fraudulent refunds.
vii. Provide guidance to the staff on issues relating to the
interpretation of law and the exercise of discretion within the
limits allowed by law.
viii. Carry out quality control checks on the work of the branch.
ix. Report persistent issues that need to be addressed through
taxpayer education, redesign of forms, changes in rules,
revised procedures etc.
x. Conduct performance appraisals of Deputy Commissioners.
xi. Identify
training
and
development
needs
for
Deputy
Commissioners and arrange appropriate training.
xii. Deputize for the Additional Commissioner as required.
9.1.4
Main performance indicators
Performance of the Branch against operational and budgetary
targets.
9.2
Deputy Commissioner (Refund & Refund Audit )
9.2.1
Purpose of job:
i. In Mumbai, managing a section within Audit Branch
ii. Ensuring that audits carried out by the section are conducted
in an impartial and efficient manner and in accordance with
the provisions of law.
iii. Auditing the complex cases, or those with the tax risk.
iv. Assisting the Joint Commissioner in the management and
administration of the branch.
9.2.2
Reports to:
•
Joint Commissioner-Head of District Office : or
6
•
9.2.3
9.2.4
Joint Commissioner(R&RA)-Mumbai
Line Manager for:
•
Assistant Commissioner (Refund Audit)
•
Sales Tax Officer(Refund Audit)
•
Sales Tax Inspector(Refund Audit)
Main duties and accountabilities
i. Assist the Joint Commissioner in the formulation of strategy
and objectives for the branch/office.
ii. Organize and supervise the work of subordinates and manage
the staff of the section.
iii. Manage and implementation of the annual operational plans,
receive reports on implementation from officers and make
monthly reports summarizing performance of unit under his
charge.
iv. Maintain the prescribed registers and prepare monthly
abstracts of such registers.
v. Ensure that clear systems and procedures are complied by
audit officer under him and to verify within prescribed time
limits and that these are consistently applied and observed.
vi. Authorize
refunds
in
accordance
with
prescribed
authorization limit.
vii. Provide guidance to the staff on issues relating to the
interpretation of the law and the exercise of discretion within
the limit allowed by law.
viii. Carry out quality control checks on the work of the section,
ensure that suspect repayments or refunds are referred for
audit or investigation as appropriate.
ix. Monitor workload and distribute evenly among officers
working in his unit.
x. Ensure that amendments to MVAT Act & Rules are circulated
and are followed in his unit.
6
xi. Conduct performance appraisals of Assistant Commissioners
in the section.
xii. Supervise assessment and post-audit jobs according to
provisions of law.
xiii. Identify training and development needs for section staff and
arrange appropriate training.
9.2.5
Main performance indicators:
Performance of the section against operational
targets (ex.
number of claims processed, average time for processing, %
cases cleared within prescribed time limits)
9.3
Assistant Commissioner ( Refund & Refund Audit)
9.3.1
Purpose of Job
Auditing VAT more complex returns and refund claims.
Supervising and advising less experienced auditors.
9.3.2
Reports to:
Deputy Commissioner(Refund Audit)
9.3.3
Line Manager for:
Sales Tax Inspector
Clerk
9.3.4
Main duties and accountabilities:
i. Carry out business and refunds audits in accordance with the
STD Audit Manual, departmental operational instructions and
annual audit plans.
ii. Provide guidance to junior staff on audit techniques and
procedures.
iii. Compile periodic reports and statistics on work performed.
iv. Maintain the prescribed registers and prepare monthly
abstracts of such registers.
v. Other duties as may be assigned by the Deputy Commissioner.
vi. Deputize for the Deputy Commissioner as required.
9.3.5
Main performance indicators:
6
*Number of audits audited to the required standard.
*Tax yield
9.4
SALES TAX OFFICER (Refund & Refund Audit)
9.4.1
Purpose of Job:
Auditing VAT returns for the purpose of refund claims
submitted by dealers.
9.4.2
Reports to
*Deputy Commissioner (Refund Audit);
9.4.3
Line Manager for:
*Sales Tax Inspector
*Clerk
9.4.4
Main duties and accountabilities:
i. Carry out refund audits in accordance with the STD Audit
Manual, departmental operational instructions and annual
audit plans.
ii. Compile periodic reports and statistics on work performed.
iii. Manage Sales Tax Inspectors and clerks.
iv. Other
duties
that
may
be
assigned
by
the
Deputy
Commissioner.
9.4.5
Main Performance Indicators:
Number of audits to the required standard.
Tax yield.
9.5
SALES TAX INSPECTOR (Refund & Refund Audit)
9.5.1
PURPOSE OF JOB:
i. Assisting the Sales Tax Officers, Assistant Commissioners and
Deputy Commissioner with refund audit casework.
ii. Carrying out audits of the small dealers(under the supervision of
more senior officers) .
iii. Ensuring that dealer files and accounting records are properly
maintained.
6
9.5.2
Reports to:
*Deputy Commissioner ( Refund Audit)
*Assistant Commissioner (Refund Audit)
*Sales Tax Officer (Refund Audit)
9.5.3
Main duties and accountabilities:
i. Provide general assistance to officers responsible for the conduct
of tax audits, including: maintaining records of audit visits and
notes of meetings; examining and analyzing business records and
other documents ;basic word –processing and spreadsheet
preparation.
ii. Conduct audits of small dealers in accordance with the
procedures outlined in the audit. Manual.
iii. Other duties that may be assigned by the Sales Tax Officer or the
Asstt. Commissioner or Deputy Commissioner.
9.6
CLERK (REFUNDS):
9.6.1
Purpose of Job:
Providing clerical and general administrative support to the
officers of the section.
9.6.2
Reports to:
Assistant Commissioner (Refunds)
9.6.3
Main duties and accountabilities:
i. Receive and register refund claims.
ii. Issue refund orders etc.
iii. File claims and other documents in dealer file.
iv. Update the prescribed registers and prepare monthly abstracts of
such registers.
v. Update the Centralized Master File in respect of refunds granted
vi. Other duties that may be assigned by the Assistant Commissioner
or Deputy Commissioner.
9.7
CLERK(REFUND AUDIT):
9.7.1
Purpose of Job
6
Providing clerical and general administrative support to the
officers of the Refund Audit section.
9.7.2
Reports to:
*Dy. / Assistant Commissioner (Refund Audit).
Sales Tax Officer( Refund Audit).
9..3
Main duties and accountabilities
i. Sort and circulate post and other communication.
ii. Schedule of appointments.
iii. File reports, returns and other documents.
iv. Update the prescribed registers and prepare monthly abstracts of
such registers.
v. Photocopying.
vi. Other duties that may be assigned by the Sales Tax Officer or
Asstt. Commissioner or Deputy Commissioner.
9.8
P.A. to the JOINT COMMISSIONER( REFUND AUDIT):
9.8.1
Purpose of Job:
Assisting the Joint Commissioner in the administration of the
branch.
9.8.2
Reports to:
*Joint Commissioner( Refund & Refund Audit)-Mumbai.
9.8.3
Line Manager For:
*clerk(JCs office)
9.8.4
Main Duties and accountabilities:
i. Prepare a list of cases in which application in form No.501 is
received and will put up to Joint Commissioner for allotment.
ii. Assist the Joint Commissioner in day to day work relating to the
administration of the branch and will keep liaison with other
officers and staff of the branch.
iii. Prepare unit wise inspection / internal Audit programs and
arrange inspection and audit.
6
iv. Carry
out consolidation of
statements
received
in
Joint
Commissioners office from audit units and submitting such
information to higher offices within stipulated time limit.
v. Organise fortnightly meetings of Unit Heads and Audit Officers
to take stalk of the performance of the branch and disposal of the
cases allotted.
vi. Solve operational/functional problems of units and update Unit
Heads regarding latest amendments relating to the branch.
9.9
ESTABLISHMENT OFFICER:
9.9.1
Purpose of Job:
Assisting the Joint Commissioner in the Establishment matters
of the branch.
9.9.2
Reports to:
Joint Commissioner
9.9.3
Line Manager :
9.9.4
Main duties and accountabilities:
i. Assist Joint Commissioner in day to day work relating to
establishment.
ii. Liaisons with other sections of the branch regarding matters of
establishment and accounts.
iii. Maintain leave records,. Dead stock registers, Service books as
well confidential records, reports and records related to
Departmental inquiry and work related thereto.
iv. Maintain the prescribed registers and prepare monthly abstracts
of such registers.
v. Look after maintenance of computer and requirements of
stationary for the branch.
vi. Carry out work related to pay bills, supplementary bills etc.
vii. Carry out all establishment matters and any other work allotted
by the Joint Commissioner.
6
INSPECTION PROCEDURE AND FREQUENCY:10.1
10.2
Inspection of Form 501 received and its distribution,
Inspection of individual units which includes receipt, disposal
and pendancy of applications
10.3
Inspection of RPO / Advice notes / Paid Advice notes and its
reconciliation
10.4
Internal Audit of cases wherein refunds have been granted
10.5
Inspection of negative cross check & its corrective actions
10.6
Inspection is to be done by PA to Joint Commissioner of Sales
Tax
10.7
Frequency of inspection will be six monthly
11. RESPONSIBILITY & DATE FOR UPDATING THE MANUAL:The
responsibility
of
preparation,
updating,
modification
&
amendment of manual lies with PA to JCST, R&RA. The date for updating
manual will be 1st April & 1st October every year.
12. RECORD FILING SYSTEM:Centralised Master File will be maintained & update by PA to JCST,
R&RA.
6
13. REPORTING FORMATS OF THE BRANCH:Statement No. R&RA-1
STATEMENT NO. 1/2
Year /
Category of
the dealer
1
STATEMENT OF REFUND AUDIT FOR THE MONTH
Opening balance
at the beginning
of the month
Addition during
the month
Cases closed due to
withdrawl/rejected/transferred
during the month
Case
s
Amoun
t
Case
s
Amoun
t
Cases
2(a)
2(b)
3(a)
3(b)
Amount
4(a)
4(b)
, 2008
Total valid
applications
No. of visits paid
out of Col.5
Summary audits
completed out of
Col.5
Amoun
t
Case
s
Amoun
t
Case
s
Amoun
t
Case
s
Amoun
t
Case
s
5(a)
5(b)
6(a)
6(b)
7(a)
7(b)
8(a)
8(b)
9(a)
Exporter
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
2006-07
Exporter
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
2007-08
Exporter
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
GRAND TOTAL
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
6
Amou
/ dis
Case
s
2005-06
Exporter
Cases closed
after visit or
summary audit
Statement No. R&RA-2
REFUND & REFUND AUDIT, MUMBAI
STATEMENT NO. 2/2
STATEMENT OF REFUND GRANTED FOR THE MONTH
, 2008
Refunds granted during the month
Year /
Category
of the
dealer
Total valid
applications
Progressive
refunds granted
during the year
Pre-audit
Post audit
As per Circulars
Total
Pending cases for
grant of refund
(Col.1-Col.2)
Bank Guarantee
Case
s
Amoun
t
Case
s
Amoun
t
Case
s
Amoun
t
Case
s
Amoun
t
Case
s
Amoun
t
Case
s
Amoun
t
Case
s
Amoun
t
1(a)
1(b)
2(a)
2(b)
2©
2(d)
2(e)
2(f)
2(g)
2(h)
3(a)
3(b)
4(a)
4(b)
2005-06
Exporter
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
2006-07
Exporter
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
2007-08
Exporter
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
GRAND TOTAL
Exporter
u/s. 8(3)
PSI
Interstate
Normal
New RC
Others
Total
7
14. VARIOUS CONTROL REGISTERS FOR THE BRANCH:REG.NO. R&RA-1:- CENTRALIZED REGISTER FOR ACCEPTANCE OF FORM -501
Sr.
No.
Name of
Dealer
1
2
Tin
Address
Dt. of F 501
4
5
3
Period
Amt.
of
Refund
Claimed
6
Category
of Dealer
7
Amt.
Granted
before
Audit
8
9
RSO No.
& Dt.
Allotted
to
Unit
No.
Reg. No.
of Audit
Unit
Dt.
of
Form-6
Amt.
Authorise
d
RSO No.
& Dt.
RPO No.
& Dt.
10
11
12
13
14
15
16
Remarks
17
REG. NO. R&RA-2:- UNITWISE REGISTER FOR ACCEPTANCE OF FORM -501
Sr.
No.
Name Of
Dealer
1
2
TIN
Address
Dt. of F501
4
5
3
Dt.
of
Form-6
Amt.
Approved
Cross
Check Reg.
No.
10
11
12
Period
Amt. of
Refund
Claimed
Category of
Dealer
Dt. of
Visit
7
8
9
6
Remarks
13
REG. NO. R&RA-3:- CORSS CHECK REGISTER
Sr.
No.
Unit
No.
1.
Reg.
Name
Dealer
2.
of
3.
Total ITC
Refund
Claimed
4.
Cross Check Issued
NO.
5.
AMONT
6.
8.
REG. NO. R&RA-4:- REFUND SANCTION ORDER REGISTER
Sr.
No.
Name of
The
Dealer
1.
2.
Tin
3.
Period
4.
Date of
Filing
Of
Return
Dt. of
Form
501
5.
6.
7
Amount of
Refund
claimed in
Form-501
7.
Refund
Granted
8.
Remarks
9.
REG.NO. R&RA-5:- REGISTER OF BANK GUARANTEE
Sr.
No.
Name of The
Dealer
Tin
Amt. & Date of
Bank Guarantee
With Bank &
Branch
Order No. & Dt.
on Which Bank
Guarantee
Accepted
Expiry Date of
Bank Gurantee
1.
2.
3.
4.
5.
6.
Assessment & Dues
Pendancy at the time
Of release of Bank
Guarantee
Date of report for
release of Bank
Guarantee
Order No. & Dt. of
release of Bank
Guarantee
Remarks
7.
8.
9.
10.
REG.NO. R&RA-6:REFUND
PROPOSAL
REGISTER
Sr.
No.
Date of
submission
of proposal
with file
sanctioning
refund
1.
Name of the
dealer
2.
3.
Tin
Period of return
/ assessment
4.
Date of
Order In
Form 502
5.
6.
Refund Amt.
Sanctioned
(Rs.)
7.
Net
Refund
(Rs.)
Signature in
taken of having
received case
record (To be
signed by R.P.O.
issuing
Authority)
R.P.O.
No.
Date of
R.P.O.
Advice
Note
No. and
Date of
payment
Date of
return
of case
record
Signature of
Refund
Processing
Officer
8.
9.
10.
11.
12.
13.
14.
Remarks
15.
REG.NO. R&RA-7:REFUND
PAYMENT
REGISTER
(To be maintained by R.P.O. issuing Authority)
Sr.
No.
UOR No.
Of The
Refund
Processi
ng
Officer
And
Officer
From
Whom The
Proposal
Received
Date Of
Receipt of
proposal
with case
record to
issue
R.P.O.
Name
Of
Dealer
7
TIN
Period
of return /
assessment
Date of
Order
In Form
502
Refund
Amt.
sanctioned (Rs.)
Date
1.
2.
3.
4.
5.
6.
7.
8.
9.
ANNEXURE -A
Notice
(Under Sub-Section 1(b) of Section 22 of the Maharashtra Value Added Tax Act, 2002)
To,
M/s. ………………………………………………
…………………………………………………….
……………………………………………………..
Reference:- TIN under MVAT Act, 2002 __________________________________
TIN under CST Act, 1956 ___________________________________
Whereas, you have applied for refund in application in Form 501 under Sub-Rule (1)
of Rule 60 of the MVAT Rules,2005 dt. ____________ for the period from ______________ to
________________ for the Refund Claim of Rs. ___________________ . To verify the
correctness of the refund claim, you are requested to make available the books of accounts for
Audit purpose.
As per the telephonic talk with you on dt. _______________ , the date for Audit at
your place of business is fixed on ____________________at _______am/pm.
Therefore, as per the provisions of Sub-Section 5 of Section 22 of the Maharashtra
Value Added Tax Act, 2002, you are requested to keep ready all books of accounts, records,
documents and declarations in relation to refund claim for verification at the time of visit. It is
also required that you should furnish self-attested copies, extracts and details of documents
required for the relevant period.
Please note that the compliance of the statutory requirements under Section 74 of
MVAT Act, 2002 are binding.
(…………………………………….)
Recon
Reconcili
Signature, Name &
Designation of Refund Audit Officer
7
ANNEXURE -B
Proposal for issue of Refund Payment Order under __________________ Act.
U.O.R.No. ______________________ Date _______________________________
PART I
1
Name of the dealer
2
Full postal address of the dealer
3
R.C. No. & Date
4
Period of Return / Assessment
5
Entry Number in Refund Proposal Register
6
Refund as per Order in Form 502
7
Refund payable as per the Order
Rs.
8
Dues adjusted (if any)
Rs.
9
Amount for which R.P.O. to be issued (7-8)
Rs.
10
Any other amount outstanding against the dealer? If so,
why not adjusted?
Remarks, if any.
11
M.V.A.
T
C.S.T
.
Date
d
Signature
Name & Designation of Refund Processing Officer
Encl. 1. File sanctioning refund for the period--------------2. ______________________________________________________
Submitted to : R.P.O. issuing authority
1. PART II
Issued R.P.O. No
from Book No
Date
for Rs
Advice Note No
Date
U.O.R. No. ____________________
Processing Officer
Signature & Stamp
of R.P.O.
issuing Authority
Date ____________________ Returned to: Refund
Place:- ………………………..
Date:- …………………………
7
ANNEXURE - C
LIST OF DOCUMENTS & STATEMENTS TO BE KEPT ON THE RECORD
1.
Monthly summary of purchases for the period of audit.
2.
Monthly summary of sales for the period of audit.
3.
Reconciliation statement of sales / purchases, if any
4.
List of Debit / Credit Notes.
5.
Goods return statement.
6.
Trading, Profit & Loss Account in case of yearly audit only.
7.
Balance Sheet in case of yearly audit only.
8.
Trial Balance in case of yearly audit only (If Balance Sheet is not prepared for part of
the Refund Audit Period and dealer having no separate financial statements for the
Branch).
9.
List of transactions of Interstate Sales / Consignment / Branch Transfers.
10. List of valid declarations in Form C / F/ H, etc. for Interstate Sales / Consignment /
Branch Transfers.
11. Certified copy of return of immediate next period (To confirm Input Tax Credit is not
carried forward).
12. Certified copy of Revised Return filed, if any.
13. Certified copies of Tax Paid Challans.
14. List of Cross Checks issued.
15. List of Cross Checks received.
16. List of Defective Cross Checks and compliance thereof.
17. Statement of set-off claim in respect of Opening Stock held on prescribed date.
ANNEXURE- D
7
INDEX TO CENTRALISED MASTER FILE
TIN:- ……………………………………………………..
NAME OF THE DEALER :- M/S.……………………………………………………………
CATEGORY OF THE DEALER:- ……………………………………………..
DETAILS:DATE
OF
FORM-501
AMOUNT
(RS.)
ANNEXURE-E
REFUND
GRANTED
(RS.)
RPO NO. &
DATE
REFUND
WITHHELD
/
REDUCED
(RS.)
Remarks
FORM AUDIT-5
Summary of Business Activities & Record for the period From …………. To ………
7
Sr.
No.
PART-I DEALERS INFORMATION
1
Name of the dealer
2
MVAT TIN :-
3
CST TIN :-
4
Date and time of visit
5
Name of the Authorised person with
Designation:-
6
Telephone Numbers & E-mail id:-
7
Address of the dealer visited
8
Effective Date of Registration
9
Name of Accountant / C.A.
10
Address of the Accountant /C.A.
11
Telephone Numbers & E-mail id of
Accountant /C.A.
12
Financial year ends on
13
Address of Principal Place of Business
14
Main Business Activity
15
Other Business Activities
16
Commodities dealt in
17
Accounting Method
18
Current Accounting Records
19
Special Comment on Records (if any)
PART-II RATIO OF BUSINESS ACTIVITIES
Turnover of Purchases
Details
Amount
Turnover of Sales
% ratio with
Total T.O.
Details
1
Imports
Exports out of
India
2
Interstate
Purchases
Interstate Sales
3
Br. Transfer/
Consignment
4
Tax Free
5
Local RD
purchases
eligible for Setoff
Branch
Transfers to
other States
Tax Free
Other Sales
u/s. 8
7
Amount
% ratio
with
Total
T.O.
6
Local RD
purchases not
eligible for Setoff
7
URD
purchases
Taxable local
sales
8
Other (please
specify)
other (please
pecify)
9
TOTAL
10
VAT Collected
TOTAL
Name of
commodities
purchased
11
12
TAX RATEWISE INPUT
Net
Amount
Tax rate
13
1%
14
4%
15
12.50%
16
Tax Free
17
Works Contract
18
other (Specify)
19
1)
20
2)
21
3)
22
TOTAL
23
Discrepancies
observed, if any:-
24
Additional
information
called from the
dealer, if any.
25
Date:-
ANNEXURE-F
Tax
TAX RATEWISE INPUT
%
with
T.O.
Net
Amount
Tax
Name & Signature of Auditor
FORM AUDIT-6
AUDIT VISIT REPORT FOR THE PERIOD FROM …………… TO …………………
7
% with
T.O.
1
Name of the dealer
2
MVAT TIN
3
Address visited
4
Person(s) interviewed and his
status in the firm
5
Date and Time of visit
6
Form Audit-5 updated, signed &
enclosed?
7
Comments on Basic Check
8
9
Inspected VAT registration
Certificate?
Checked VAT return filing
records?
10
Checked VAT payment records?
11
Compared dealer's record to VAT
return summary?
12
Record tax period checked?
13
Details of check undertaken
Specify the records examined,
period the check were applied to
Discrepancies found.
14
15
16
17
18
19
20
Post visit action (specify actions taken)
21
Cross Checks issued
22
Revised Returns Filed
23
Assessment initiated
24
Communication with other
Branches
25
In case of their actions (specify)
26
Recomputation of Refund
27
Refund claimed as per Return
28
Less- Claim reduced after audit
29
Refund allowable
30
Provisional Refund Granted
31
Additional Refund to be granted
/ Refund to be recovered
7
32
33
Interest leviable on excess Refund
Granted
Refund to be granted / Dues to be
recovered
34
Summary of Audit findings
35
Change in commodity code
36
Change in business activity
37
VAT under declared
38
Reasons for under declaration
39
VAT over declared
40
Interest (if applicable)
41
Penalty (if applicable)
42
Reasons for disallowing of refunds (if applicable)
43
44
45
46
47
Further findings (in respect of disallowances etc) Actions to be taken by other
Branches
48
Return Branch
49
Business Audit Branch
50
Registration Branch
51
Enforcement Branch
52
Other (Specify)
Audit Report as submitted above may be authorised & approved
Signature
Place
Name:-
Date
Designation:-
Submitted to the Dy. Commissioner of Sales Tax / Joint Commissioner of Sales Tax
Remarks of Supervisory Authority:Signature
Place
Name:-
Date
Designation:-
8