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e-Return preparation software for Karnataka Value Added Tax

Frequently Asked Question on VAT Info

01.

What is the difference between the Book and the CD?

	Saral VAT Info is an Exclusive Package that consists the Commercial Tax Laws at one place with exclusive features.
	Saves time in finding out the Rates for any particular product.
	All the Products are hyper-linked to its Schedules and the Hyper-links are made across the Package
	Forms can be opened in Word Format and can be filled up and taken a printout directly.
	Superior Search Engine helps the user to search any particular Word in the entire Package.
	CST, KST, ET, Cess and TOT at a single Click.
	Latest Notifications and revision of Rates are updated on the Web.

02.

Though we have already purchased the books, why should we purchase the C.D again?

	Both have got their own features. You will be saving a lot of time by using Saral VAT Info since the Package is hyper-linked through out.
	The Book will not update you till you buy a new Edition.
	Whereas Relyon shall update the Package over e-mail and through Web-site at no extra cost till 20th March, 2002.

03.

Who are the people involved in development of the Program? What is the source of information/data in the Package?

The data has been collected directly from the Commercial Tax Department. Moreover, the team behind this Package are the Chartered Accountants, Advocates and Cost Accountants, having more than 25 years experience in this field.

04.

This package will be of help to the user only for a Year or so. VAT is being expected to commence from the next year. How are we benefited?

	We understand that most of the Tax Consultants will be solving their client's problems that are pertaining to the last 2-3 years.
	Though the VAT comes, you will be using this Package for atleast 2-3 years.

05.

How will the PACKAGE be updated when the VAT is implemented?

	Relyon will be developing an entirely new and different Program on VAT.
	Relyon will intimate you over e-mail and will give the package at a discounted rate to all its KCTLC users.

06.

What are your Upgradation Charges for the Next Year?

Since the Government's decision on VAT is uncertain, we wish to inform you that in case VAT is implemented, we will be coming up with a new Package on VAT. At the moment, we are not sure about the work that involves in developing of this Package. Hence, we are not able to decide the cost of this Package now.

07.

How do I receive the Latest Information?

	Log on to www.relyonsoft.com/KCTLC/upgrade.htm for updated information for the year 2001-2002. (till 20th March 2002)
	Updations are made from time to time at no Extra cost for the current financial year till 20th March 2002

08.

How do we update our Package, in case we do not have Internet Facility?

You can bring your CD to our Office and get it updated.

09.

Do you charge extra for updation?

No. It is a complimentary service to all our Users for the current financial year till 20th March 2002.

10.

How do I apply for Additional Installation in the same Organization?

You can install the same CD in different Computers but you need to buy an additional License at a cost of Rs.500/- per License.

11.

Do you have any Help Manual?

	Saral VAT Info is facilitated with the Help Utility that captures the entire Package.
	You may contact Relyon as well for any kind of Help related to Software.

12.

How to find the rates for the years before 1998-99?

Refer the Actsual Schedules provided in the Package.

13.

We do not have CD Rom Drive, how can we install Saral VAT Info?

	Package can be installed by us with our CD ROM Drive at an additional cost of Rs.250/- per installation (within Bangalore).
	We can also install certain Packages with the Floppies as well.

14.

How do I fill the Forms?

	The Package consists an Option Button to open any Particular Form in Word Document.
	Either you can open it in this format or you can copy the Form and paste it in the Word Document

15.

Which is the competitive product for this Package? And how is Saral VAT Info different from the other Packages?

	No other packages has captured the Karnataka Commercial Tax Laws and Tax Rates to such an extent.
	Saral VAT Info is rated very reasonably that gives value for your Money.
	Relyon leaves its users to compare Saral VAT Info to its competitive Packages.

16.

What about the details of Case-laws and the Judgements pertaining to the Karnataka Commercial Tax Laws?

It is being examined and the same shall be inserted after the feedback survey from the Market is received.

17.

What is the Software Requirements to install Saral VAT Info?

	Windows any version 95, 98, ME, 2000, NT and Internet Explorer 5.0 or more is required.
	For those who does not have Internet Explorer in their System, they can install the same from the Installation files provided along with Saral VAT Info C.D.

18.

What are the System Requirements to install Saral VAT Info?

	Processor - Pentium+
	RAM - 32 MB Recommended
	Hard Disk - Minimum of 100 MB free space

19.

How much space does Saral VAT Info require?

25MB Hard Disk Space

20.

What is the Programming Language and Database using which the Package is developed?

	Front End - Visual Basic 6
	Back End - MS Access'97

21.

If I have problems operating the Program, what kind of after-sales-support will be provided?

Contact Relyon through E-Mail or over phone. You can also send the suggestions and queries through the option available in our Software Packages.

22.

If the Computer with the Software installed gets damaged and If the Package needs to be installed in some other Computer how should we do it?

	If you want to reinstall in the same computer you can use the C.D. again and it will not ask for the License.
	But, if you are installing in any other Computer please contact Relyon for assistance.

23.

Is it possible to access this Package through Network?

No. It is not possible.

24.

Can we suggest any improvement? If so, how?

	Your Suggestions are most welcome. Relyon shall incorporate the same in our next version.
	You can Contact Us through E-mail at info@relyonsoft.com for any Suggestion/Query or by Phone.

25.

Though we are Tax Consultants, how would referring Saral VAT Info to our Customers benefit us?

	Saral VAT Info can never replace a Tax Consultant. It can help him to give the consultation easily and quickly.
	In case you refer our product to your Customers, the number of times he calls you may reduce. He need not call you for every small problem he may come across.

26.

Are there any incentives for referring your Product to others?

Yes, the same will be considered on materializing the Sales.

27.

Would Relyon be helping in Sales Tax matters?

Relyon can refer you to the Consultants who are experts in this field.

28.

What are your other Products?

	They are iaCcess, Petty Cash, Vakilji, CAD related Software Packages and other application packages like Inventory, ESI & PF, Wage Calculations, Individual IT Calculator, Billing Utility for Medical Transcriptions and others.
	We also undertake web-designing.

29.

Who should register under VAT?

	Every Dealer whose taxable turn over exceeds two lakh Rupees during the year has to pay VAT
	Every dealer whose taxable turnover exceeds fifteen thousand rupees in any of the month has to pay VAT

30.

What is the limit for a dealer under CoT?

	Dealer whose total turn over does not exceed two lakh Rupees in any of the four Quarters will come under CoT

31.

Can I File VAT Quarterly Return?

	Yes , VAT Return can be filed Quarterly

32.

What are all the changes in VAT for the year 2006-2007?

	VAT110 which was used for revised return is now the return for Casual Traders
	For any correction, VAT100 should be used by mentioning the 'Type of return' as 'Corrected'/'Revised'/'Final'
	Commodity-wise particulars (both Sales as well as for Purchases including non-sale transactions) should be provided in the Annual Statement
	Entry and Special Entry Tax Return form part of VAT100
	Annexure I is introduced which is extract of local purchases. which forms a part of VAT100
	Annexure II is introduced for giving particulars related to statutory forms like C form etc.,
	Computation of ineligible portion of input tax under Sec 14 and Sec 17 has been revised and a new formula is given
	Introduction of Annual Return
	Introduction of Form 6 and Form 170

33.

What is Annual Return?

	Form 115 is the annual statement to be submitted by a dealer under VAT after the completion of the year 2006-07. This contains commodity wise information for all types of transactions.
	Form 135 is the annual statement to be submitted by a dealer under CoT after the completion of the year 2006-07.

34.

What is Form 6?

	Form 6 is the form to update registration data. Form 6 has to be filled in and attached to the return for the last month of every year

35.

What is Form 170?

	Form 170 is the Register of Purchases made within the state under Rule 33(2). Every dealer shall keep the account of Purchase made within the state in form 170

36.

What is Annexure - I and Annexure - II?

	Annexure - I contains the details of Input-Turnover (Local) and Tax Paid as per Tax Invoices. This information shall be furnished by a VAT dealer whose turnover for the preceding year is less than 2 crores and/or less than 16 lakhs during the month.
	Annexure - II contains Details of statutory forms filed for the particular quarter ending

37.

Can a CoT Dealer buy CST goods?

	Yes , A CoT Dealer can buy CST goods.

Frequently Asked Question on VAT

What is VAT?

Each commodity passes through different stages of production and distribution before finally it reaches the Consumer. Some value is added at each stage of the production and distribution chain. Value Added Tax (VAT) is tax on value addition at each stage. Under VAT system, a dealer collects tax on his sales, retains the tax paid on his purchase and pays balance to the Govt. Treasury. It is a consumption tax because it is borne ultimately by the final Consumer. The tax paid by the dealer is passed on to the buyer. It is not a charge on the dealer. Hence, VAT is a multipoint tax system with provision for set off of tax paid on purchases at each point of sale.

How is VAT computed?

The dealer pays VAT by deducting the tax paid on purchases (input tax) from his tax collected on sales (output tax). Hence, VAT = Output Tax – Input Tax.
For example: A dealer pays Rs.10.00 @ 10% on his purchase price of goods valued Rs.100.00. He sells the goods at Rs.150.00 and collects tax amounting to Rs.15.00 (@ 10%). He will pay Rs.5.00 (Rs.15.00- Rs.10.00) as he has already paid Rs.10.00 to his seller while purchasing those goods.

How is VAT different from Sales Tax?

	VAT will have only four rates instead of large number of rats of Sales Tax, with off setting of tax on inputs against that on output; VAT does away with tax on tax. Claiming input tax credit under VAT ensures proper invoicing. Overall, these features of VAT encourage disclosure of complete information on business turnover.

Who is to be covered by VAT?

	All business transactions carried on within a State by individuals, partnerships, Companies, etc. will be covered by VAT.

Who will not be covered by VAT?

VAT will not cover small business with a turnover below a certain limit. In Orissa, a general trader having annual turnover of Rs.2, 00,000/- or more will be covered under VAT. The dealer, who purchases goods from outside the State for resale inside the State, or sells to outside the State, is liable to pay tax on his first transaction. The taxable limit for works contractor is Rs.50, 000/- and for manufacturer is Rs.1, 00,000/-.

What are the tax rates under VAT?

	There are just four rates under VAT- the zero rate (exempted goods), 1%, 4% and a general rate of 12.5%. These rates will be uniform in all States across the country. The same set of goods will be charged at the same rates in all the States. Most essential commodities are exempt from VAT or fall in the category of 4%.

Will VAT increase the cost of compliance?

	No. The cost of compliance will come down due to self-assessment as dealers will not have to approach the department for statutory forms or for assessment.

Will the cost of doing business go up as dealers will have to pay tax on their purchases?

	No. If we assume that the average time required for settling amounts receivable and payable is the same as the time for remitting tax and processing any refund, no additional cost is imposed on trade or industry.

Will prices go up due to VAT and will the consumer suffer?

	No. As against three slabs of 4, 8 and 12 per cent in the present regime VAT will have only two major slabs of 4 and 12.5 per cent; some commodities falling in the 8 per cent slab will come down to the 4 per cent slab, bringing the prices down. Further, input tax credit and credit allowed for purchase of capital goods should reduce the effective selling price.

10.

Will input tax credit be available on capital goods used in the execution of works contract?

Yes. Input tax credit will be available on capital goods purchased after April 1, 2005 for execution of works contracts in NCT of Delhi subject to conditions. However, in case a dealer, after availing tax credit, transfers the assets/capital goods, on which he had availed tax credit, out of NCT of Delhi for executing other works not liable to be taxed in Delhi, the credits so allowed shall be reversed and tax will have to be paid on such transfer of capital goods/assets. The tax so payable shall be equivalent to the unutilized portion of tax credit allowed by the department less tax payable at usual rates on such transfer or sale.

11.

What is zero rating under VAT? How does it differ from exempt goods?

Zero rate is applicable to goods for certain transactions under VAT and input tax credit is available on those transaction. Under VAT, the goods exported outside India, sold to an EOU and to a dealer having business under a Special Economic Zone (SEZ), Software Technology Park (STP), Electronic Hardware Technology Park (EHTP) are zero rated. In these transactions the tax rate will be zero and input tax credit will be available. The propose is that the goods exported or sold to outside the State will be free of any load of tax in it, which will increase competitiveness and encourage exports.
Exempt goods are those goods whose tax rate is zero, but input tax credit will not be available. Essential items such as agricultural implements manually operated or animal driven, books, periodicals, journals, fresh milk, etc. are in the exempted category.