FAQ

51. Are services included in VAT?
A. Services would be included in future.

52. Will exemptions continue ?
A. Yes exemptions would continue of few commodities.

53. Are there any statutory declaration forms under VAT ?
A. There are no statutory forms under VAT.

54. Would the product classification under each category be uniform ?
A. Yes, we are trying to classify products using a uniform system of nomenclature.

55. Is it possible to use old local sales tax number as new sales tax number for VAT?
A. Yes, it is possible to do the same if your turnover exceeds the threshold value (Rs. 5 Lakhs).

56. Will the new registrants have to give surely ?
A. No, only if you are below the threshold, surety is required.

57. What will be the frequency of filing returns ?
A. Frequency of filing returns would be monthly/quarterly.

58. What is the rate of interest on late payment ?
A. The rate of interest of late payment is 2 per cent. This rate is as prescribed for delayed payment for Income tax/ Excise laws.

59. Would dealers be allowed to print their own stationery of statutory declaration forms ?
A. There are no statutory forms under VAT system. Dealers are allowed to print their own tax invoices.

60. How will management of accounts be easier ?
A. Since all sales would be taxable and all purchases be tax paid, the classification/bifurcation of various kinds of taxable/non taxable sales need not be maintained.

61. What is an invoice ?
A. Invoices are crucial documents for administering VAT because they record each supply of goods, whether taxable exempt. They are to be issued by all registered dealers for each of their sales. An invoice establishes both the tax liability of the supplier and the deduction (credit) to the registered purchaser. There are two kinds of invoices that can be issued under VAT i.e. Tax Invoice & Retail Invoice.

62. What kinds of invoices are required for VAT? Why is the name and address of the printer mandatory?
A. Tax and retail invoices for a registered dealer/ consumer sale respectively is a normal VAT practice. Name and address of the printer is not mandatory.

63. What is a Tax invoice and when can I issue it ?
A. If you are making a local sale to another registered dealer of Arunachal, a tax invoice can be issued. Specially, tax invoice should always mention :
· Identity of the seller (with pre-printed registration number, name & address)
· Identity of buyer (with name & address ); and
· Amount charged with the amount of tax charged in the transaction indicated separately.
The purchaser, on the strength of the tax invoice, can claim the benefit of input tax credit of the VAT paid on his purchases. (Provided his purchases are such that credit of the tax paid on them is allowable)

64. What is a Retail Invoice and when can I issue it ?
A. In retail sales, which are much more numerous and of smaller amounts, simplified sale invoices or retail invoices can be issued. Although retail invoice should always identify the seller, indication of buyer’s name is optional and tax charged can be included in the sale price. No tax credit can be availed by the purchaser on the strength of a retail invoice.

65. What kinds of books of accounts are required to be maintained under VAT?
A. The VAT book-keeping is very simple and can be kept even by enterprises that do not maintain full books of accounts or do not use double entry accounting. Taxpayers are essentially required to keep two books:
· Purchases Book ; and
· Sales Book.
These books are a record purchases and sales respectively and are specifically designed for easy calculation of VAT. Simplicity of record keeping is the major objective in designing of these books.

66. Describe the format of the Purchase Book.
A. The Purchase Book is a record required to be maintained buy all registered dealers. If should be used to log those purchases against which credit is allowed and those against which credit is not allowed, separately.

67. On which purchases can I not take credit?
A. Credit is not allowable for any purchase used for consumption or producing non-taxable output. Further, purchase of fuel for consumption, food, liquor etc. is also eligible for credit.

68. On which purchases can I take credit?
A. You can take credit on all business inputs that are used to produce taxable output.

69. Describe the format of the Sales Book.
A. The sales book is a record to be maintained by all registered dealers, and is used to record the total volume of sale, and to distinguish between export, exempt, inter-state and taxable sale.

70. In case of original tax invoice being lost will credit be allowed on personal surety and not on duplicate invoices?
A. No, this is normal VAT practice.

71. How will the scrutiny be targeted?
A. Scrutiny would be targeted by using computerized selection.

72. Will there be a compulsory scrutiny for returns filed late?
A. No. Continuous default in returns will lead to increased possibility of scrutiny.

73. Will some of the self-assessed returns be scrutinized ?
A. Yes a small percentage will be selected for audit assessment.

74. Would assessment be conducted at the business premise of the dealers ?
A. Yes, this is normal VAT practice.

75. Is there a provision for revision of assessment order in the Arunachal Goods Tax Bill?
A. Appeal provision is available. There is no need for a parallel alternate forum.

76. With the introduction of Entry tax, would transporters be also required to register for VAT?
A. The liability of Entry tax is on importer. If the importer is a businessman, he gets full credit of the entry tax paid. Transporters will have option to obtain an Approval Certificate from the Tax Department.

77. What will be the responsibility of the transporter?
A. If you are an approved transporter, then before handing delivery you must ensure that the importer has fulfilled liability of Entry Tax. If you are not an approved transporter, then before entering Arunachal, you have to ensure that the importer has fulfilled liability of Entry Tax.

78. What happens if I do not do this?
A. You will be liable for penalty.

79. Are Railways and Airlines also covered under the system?
A. Yes.

80. Are transporters required to file any returns?
A. No.

81. Will there be any assessment / audit of the transporters?
A. Yes, transporters, railways, airlines can be assessed / audited for levy of penalty, if any.

82. Is Input Tax credit available to unregistered declares also?
A. For dealers below the threshold and unregistered, there is no out put tax liability nor any input tax credits. However, if you cross the threshold, you are liable for output taxes, and can avail input tax credits. If you choose not to register (even after the crossing the threshold), you are liable for penalty and you don’t get any refunds.

83. Can a registered dealer claim credits for a purchase from an unregistered dealer?
A. No, you cannot claim credits for purchase from an unregistered dealer. However, there is a special “deemed credit” system for purchases of “second hand” goods from unregistered dealers, if you are in the business of sale/purchase of “second hand” goods.