27. Would dealers be permitted to adjust the tax credit in the next financial year ?
A. Yes, dealers would be allowed to adjust the tax credit in the next year.
28. Will refund be carried forward to the next year ?
A. Yes, you will be allowed to carry forward refund to the next year.
29. Would credit be given on the tax paid on the opening stock on the commencement of the act ?
A. Yes, credit would be given on the tax paid on the opening stock on the commencement of the act.
30. With the implementation of VAT, would dealers be required to keep more working capital ?
A. No. The tax on the stock inventory is to be paid from the tax collected by you on your sales and not from your pocket.
31. What is the frequency of returns ?
A. The frequency of returns is quarterly for those dealers with annual turnover less than Rs.5 crore and monthly for those with annual dealers with annual turnover more than Rs. 5 crore. However, you can choose to file monthly returns even if your turnover is below Rs. 5 crore.
32. By how much time will refunds be paid ?
A. The refund will be paid within 30 days. In case of a delay, interest will be paid on the refund amount.
33. What is the rate of interest in case of delayed refunds ?
A. The rate of interest of late payment is 1 percent. This rate is as prescribed for delayed payment for Income tax/Excise laws.
34. What is the documentation required to be submitted with the return to get refunds ?
A. Normally, proof of exports is required to be submitted with the return to get refunds.
35. Which inputs can I claim set-off of ?
A. Any business inputs which is used to produce a taxable output in Arunachal is allowed for set-off. However, there is a list of items that if consumed even in business process are not allowed for input tax credit.
36. Apart from input credit on raw material would dealers be allowed to claim credit on other costs like labor, overheads ?
A. VAT paid on any business input would be allowed to be set off. Since services are not a part of VAT as of now, no tax is levied on it and no credit allowed. However, in future, when services will be included, full credit shall be given even for service inputs.
37. I am a manufacturer. Goods manufactured by me are both taxable and exempt. How do I do the entries in the Purchase Book when the inputs are purchased ?
A. Inputs (raw material as well as finished goods) that go in exclusively for manufacture of taxable goods are to be put in creditable purchases (provided other conditions are also met). Similarly, inputs that go in exclusively for manufacture of exempt goods are to be put in non-creditable purchases. However, the inputs that go in partially for manufacture of exempt goods and partially for taxable goods, such purchases are to be appropriated in the ratio of taxable : exempt out put. Alternatively, you can maintain two separate inventories of such inputs (a) for use in manufacture of taxable goods and (b) for use in manufacturing of exempt goods. Then, all the purchases that are credited into inventory (a) can be claimed credit of and for all others, credit is not allowed.
38. How do I calculate Input Tax credit on purchases against which partial credit is available?
A. If you are using the second method as explained in the last question, you can avail input tax credit of all purchases of input that you credit into the inventory “for use in manufacture of taxable goods” while all the purchases of inputs that are credited to the inventory “for use in manufacture of exempted goods”, shall not be entitled for input tax credit.
If you are using the first method, at the end of each quarter, the input tax charged on purchases for which partial credit is available, is to be proportionately divided using the following formula :
Credit Allowed = I * T/(T+E)
I : Input tax charged on purchases, for which partial credit is available, made during the quarter.
T : Total sales of taxable manufactured goods made during the quarter and zero rated sales.
E : Total sales of exempt manufactured made during the quarter + revenues from outputs not available under VAT system.
Finally, at the time of filing the last quarter return, you are required to perform the same calculation based on the total value of purchases for which partial credit is available, and total value of sales (of exempted and taxable manufactured goods) made during the year. This will be the total credit allowable for the year (on account of inputs for which partial credit is available). After adjusting the credits already taken in the previous quarters, the remaining credit can be availed in the last quarter.
39. I am making inter-state sales, which type of invoice am I supposed to issue ?
A. Retail invoices are to be issued in case of interstate sales, interstate branch transfers and exports.
40. Keeping in mind the C & H forms requirements, what is the stipulated time for filing self assessment ?
A. With the streamlining of issue of C forms, CST self-assessment can be completed in 6 months after the close of the year. Filing of return is the Self Assessment under the Arunachal Goods Tax.
41. What are the documents required to be submitted for refunds arising in cases of interstate sales ?
A. You have to file a bank Guarantee of the amount of refund claimed in lieu of Central Statutory forms. This Bank Guarantee shall be released whenever you furnish the Central Statutory forms.
42. I make purchases intended for sale on Inter-State basis. Can I avail input tax credits on such purchase ?
A. Yes, on purchases intended for sale on Inter-State basis as well as exports, input tax credits can be availed.
43. What are the timelines for providing refunds ?
A. Refunds would be provided in 30 days from the date of filing returns.
44. Is a guarantee required for refunds ?
A. Normally not. If the documentation with the return is complete (i.e. you file the C/F forms etc.) no guarantee is to be filed. However, in case where the C/F forms etc. are not filed with returns, bank guarantee equal to the amount claimed as refunds is required until the C/F forms are filed.
45. Can we get refunds or only adjustments ?
A. You can avail of either based on your personal choice.
46. What is an Approved Warehouse ?
A. Approved warehouses are authorized warehouses, where a re-exporter can temporarily store the goods, without levy of Entry Tax on it.
47. Would three be entry tax on goods imported for exports ?
A. If goods are not stored in the Approved warehouses, in such cases, entry tax is required to be paid first and then refunded. There are providing provisions for “Approved warehouses” to take care of such cases and thereby solve the case flow problems of the re-exporters.
48. Will we get set-off for Entry Tax on stock transfers ?
A. If you stock your goods (intended for re-exports) in a bonded warehouse, no Entry Tax is levied. Hence there would be no set-offs either (which means that you can bring goods in Arunachal free of Entry Tax, store it an Approved Warehouse and subsequently branch transfer it again, free of tax). Otherwise also, if you purchase locally /pay entry tax on imports and subsequently branch transfer it, you will get input tax credits on branch transfers also.
49. Should VAT be implemented as long as CST and Entry tax are in force ?
A. VAT is a reform of local tax law, independent of CST, VAT will make Arunachal trade more competitive, irrespective of whether CST rate in Assam and other States is reduced or not. Entry tax is a part of VAT implementation methodology. In fact, VAT can’t work without entry tax.
50. Should VAT be implemented in all states simultaneously?
A. VAT is expected to make Arunachal trade more competitive vis-à-vis other states and therefore it is not necessary for us to wait for other states to implement the same.
