PRACTICAL TRAINING ON INDIRECT AND DIRECT TAXATION .This presentation will help you learn about a part of indirect tax ( VAT , COMPOSITE SCHEME, REGISTRATION PROCEDURE , STDS ETC.)

1. PREFACE
HOW AND WHY
This course 'HAW' will help you learn about
different aspects of indirect and direct taxes
and practical application thereof in accounts
.
 Finalization of accounts
 Computation of MPBF (Maximum Permissable Bank Finance)
 Computation of Income Tax ( Company and Individual)
 Computation of MAT , Deferred Tax Liability
 Calculation of Capital Gain , Tax relief u/s 89
 Procedure to keep records and e-filing of Return- TDS ,Income Tax , VAT,
Central Excise , Service Tax , P.Tax etc.
 How to maintain accounts of a company , firm , proprietorship business
 How to maintain accounts of manufaturer , service provider , developer of
residential complex etc.
 Operating Tally more friendly and efficiently .
 How to use excel to manage large volume of data /information

2. TAXES IN INDIA
DIRECT TAX INDIRECT TAX

3. Indirect Tax : It is collected by intermediary
Indirect Taxes in India :
 VAT
 STDS
 CST
 ENTRY TAX
 ENTERTAINMENT TAX
 LUXURY TAX
 STT
 CENTRAL EXCISE
 CUTOM DUTY
 SERVICE TAX

4. VAT (VALUE ADDED TAX IN WEST BENGAL)
• It is a multi-point tax and rate of which
varies from state to state
• As on 31.01.2016 VAT rate is 1% ,5%
and 14.5% in West Bengal .
• In some cases VAT rate varies according
to capacity and price of goods ,for
example 14.5% for AC having capacity
above 1 ton , Motor Car (price exceeding
10 lacs)

5. Registration Procedure :
a) Compulsory Registration : Turnover > 10
Lacs
b) Voluntary Registration : Turnover <=10
lacs

6. E-Application for VAT registration : FORM 1
Select online Application Type
www.wbcomtax.nic.in
Fill up " Dealer Info/Dealer details"
Addl. place of business
Contact person

7. Warehouse & factory address
Commodity details
Bank details
Annexure B
Applicant (Dealer/
Firm /Pvt. Company)
Annexure A
Proprietorship /
Partnership Firm

8. Specified by " * " Mandatory Field : Name, Trade
Name, Address of Principle Place of Business,
Status of Business , Nature of Business,
Occupancy Status of Applicant
Acknowledgement Slip along with Application Number
Print the Acknowledgement Slip and Copy of Application with
data
Pay Rs. 100/- as Registration Fees , In case of
voluntary registration pay Rs. 25000/- as security
deposit

9. Submit all the necessary documets as mentioned
below along with printed copy of Application and
Acknowledgement Slip within 3 days from date of
application
• Trade License
• PAN
• Professional Tax Enrolment Certificate
• Partnership Deed / Articale of Association /Memorandum/ Company's
Registration Certificate
• Voter Card
• Rental Bill , Agreement Paper, Municipal Tax Bill , NOC (No Objection
Certificate)
• Purchase and Sale Bill of Rs. 50000/- to be submitted as a proof of
transaction being a dealer
• Bank Statement
• Passport photo
• Transporter /Transporting Agent shall apply for enrollment in
prescribed format i.e. Form-10

10. After application you will get TIN (Tax payer's
Identification Number) / VAT No. containing
11 digits .Significance of the digits are as
follows :
First Two Digits : State Code
Next Two Digits : Charge Code
Next Four Digits : Registration Number
Nineth Digit : ' 0 ' (Registered under VAT Act
' 1' (Registered under Sales Tax Act 1994)
' 2 ' (Registered under CST Act )

11. A) COMPOUND VAT RATE (COPOSITION
SCHEME)
a)This scheme is not applicable for :
i) Manufaturer
ii) Importer / Exporter
iii) Works Contractor
iv) Branch Transfer and the dealer
registered under CST Act 1956
• Form 1CR is applicable for
Composition Registration

12. How to pay tax under composition scheme :
i) 0.25% of total turnover in a financial year
or
a) 7000/- per annum if turnover <= 30 Lacs
b) 12000/- per annum if turnover > 30 Lacs but <=
50 Lacs.
To continue this scheme Form 16 is to be submitted
every year to Deputy / Addl.Commissioner .
A composite dealer is not entitled to levy VAT
while selling goods and must mention
'Composition Scheme' (either in printed form /
by using rubber stamp) in the invoice .

13. COMPOUND
• Goods can be procured without paying
VAT against Form H
• A dealer can purchase goods paying
VAT and can apply directly to the
Commissioner .Within 3 months from the
date of application the dealer will be
entitled to avail 100% ITC (Input Tax
Credit) .In this case Declaration Form
32,35, 36 and 37 are used according to
requirement .
B) VAT regarding goods purchased for
100% export

14. Computation of VAT for Works Contract
• Works Contract : Execution of jobs like
construction of building , fabrication and
installation , repairing bridge , building , involves
service and transfer of goods.
Method of calculation of turnover sales :
a) Aggregate of CTP
(Contractual Transfer Price) 20000
Less :i) Expenditure for design 1000
ii) Payment to Sub Contractor 3000
iii) Consumable items 6000
(Fuel, Electricity etc.)
iv) Administrative expns. 1500
Taxable Turnover 9500

15. b) Aggregate of CTP 20000
Add : VAT @5% on 50 % of 20000 500
VAT@14.5% on 25 % of 20000
725
rest 25 % is labour cost
_____________________________________
Total 21225
This method is as simple as safe to apply
where expenditures can not be sagregated
due to keeping records improperly .

16. Different rate of percentage
according to nature of job
•
Sl. No. Nature of Job
Percentage of
deduction from CTP
% of CTP on
which VAT
@ 5% levied
% of CTP
on which
VAT @
14.5%
levied
1
Fabrication and
installation of
plant and machinery
25 50 25
2
Installation of frame ,
doors , windows
20 10 70
3
Supply and Installation of
Air Cooler
15 5 80
4
Supply and installation of
electrical equipments
20 50 30
Supply and fixing of tiles ,

17. STDS (Sales Tax Deducted at Source)
• It is a type of TDS which is deducted from
payment to works contractor . It is not
applicable for pure labour contractor .
3% for registered contractor
Rate
5% for unregistered contractor
The following company/board/society can
apply for enrollment for STDS :

18. Central Government State Government
Central & State Govt.
undertaking
Gram Panchayat Panchayat Samiti Zilla Parishad
Municipality Corporation Co-operative Society
Company Partnership Firm Joint Venture Comapny
Promoter (other than
Individual / Proprietor)
Bank Educational Institute
Hospital Nurshing Home Diagonastic Centre
LLP (Limited Liability
Partnership)

19. • Time Limit : User can e-file Form 19
(Details of deduction from the contractors
for the month) within 20 days from end of
month
• STDS is not applicable for transaction not
exceeding Rs.10000/- in a financial year
• Payment of STDS : TR Form 12A (Two
copies)
• Deductor will issue a STDS certificate
i.e.18A within 25 days from end of the
month

20. Guideline for availing ITC (Input Tax Credit) :
Goods
purchased
Nature of
Business
ITC Reason
Computer
Interior
Decoration √ Designing
purpose
Computer
Cement
manufacturer
X
ink for
printing
Printing and
Advertisement √
Banner
printing
Electrical
Item
Any type X
used for
repairing
Consumabl
e Item like
petrol,
electricity ,
water etc.
Any Type X
Negative
List
key points :
• Purpose of purchase
• How purchased item is
related to output .
• If goods are purchased
from unregistered dealer
and such goods are
directly used for
manufacturing than no
purchase tax is rquired to
pay .But if the goods are
transfered as such to
other in lieu of a valuable
consideration other than
sale ,tax is payable on
such transaction

21. Payment of Tax U/S 31 :Due date within 20 days
every month following preceding month
Return U/S 32 : Return must be submitted
within the month after completion of
quarter
Form 14 General
Form 14A for registered re-seller
Form 14B for registered manufacturer
Form 14C for registered works contractor