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Value Added Tax Interview Questions & Answers - Learning Mode

Value Added Tax Interview Questions & Answers - Learning Mode

The Sales Tax is the most important source of revenue of the state governments; every state has their respective Sales Tax Act. The tax rates are also different for respective states. Tax imposed by Central government on sale of goods is called as Sales tax same is called as Value added tax by state government.VAT is additional to the price of goods and passed on to us as buyer (end user). Around 220+ Items are covered with VAT.VAT rates vary based on nature of item and state. Government is planning to merge service tax and sales tax in form of Goods service tax (GST).

Try Value Added Tax Interview Questions & Answers - Exam Mode

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Value Added Tax Interview Questions & Answers - Learning Mode
Try Value Added Tax Interview Questions & Answers - Exam Mode
Question: What is Taxpayer Identification Number (TIN) in Value Added Tax (VAT)?

Answer: The registration number allotted to the dealers is popularly known as TIN i.e. Taxpayer Identification Number. This is a eleven digit number to be quoted in all VAT transactions and correspondence. Source:
Question: How will the refund be issued to the exporters (dealers who effect zero rate sale)?

Answer: The dealer who claims refund due to zero rate sales may file an application in Form D1 to the assessing authority along with copies of the purchase invoices of related goods. After verification the assessing authority will issue refund within 90 days from the date of receipt of application in Form D1.

If the excess amount is not refunded within ninety days, whatever may be the reason, the assessing authority will issue refund along with interest at the rate prescribed in the Act. If the d Source:
Question: What are the taxes that will be replaced by Value Added Tax (VAT)?

Answer: General Sales Tax, Resale Tax, Surcharge, Additional Sales Tax will be replaced by VAT. The Central Sales Tax Act, 1956 regulating the inter-state transactions of sale and purchase will continue. The Entry Tax on Vehicles and Goods will continue. Source:
Question: Will there be Input Tax credit for all Capital Goods?

Answer: Yes, but not for all. Goods notified by the Government are not eligible for Input Tax Credit which are under the negative list and not eligible for the Capital Goods purchased before 1.1.2007. Source:
Question: Whether deferral and waiver will continue?

Answer: Yes, by application for continuance to the Assistant Commissioner concerned, Waiver unit may opt for deferral on application. Source:
Question: What are rates of tax under Value Added Tax (VAT)?

Answer: The rates are 1%, 4% and 12.5% on goods eligible for input tax credit. Source:
Question: What are the distinct features under the VAT Act?

Answer: Self-assessment without conditions, One time registration without renewal, non-changing TIN irrespective of change of place of business, non-production of accounts annually for the purpose of assessment, simplified low rate structure, removal of salesmen permit, Input Tax Credit, abolition of additional levies like SC, AST, RST, self-declaration for Industrial Inputs in lieu of Form XVII, Input Tax Credit for Capital goods and opening stock, and refund for exporters (zero rate sellers) are the d Source:
Question: What is Value Added Tax (VAT)Input Tax?

Answer: Value Added Tax (VAT) Input tax is the amount of tax paid on local purchases by a registered dealer to another registered dealer. Source:
Question: What is Industrial Value Added Tax (VAT) Input?

Answer: The Industrial Value Added Tax (VAT) Inputs are those goods which are notified by Government and generally go into manufacture of other goods and they are taxable at 4%. Source:
Question: Is there any time-limit to claim the Value Added Tax (VAT) Input Tax Credit?

Answer: Yes. In the case of goods held in Closing stock on 31.12.20015,the time-limit is within 30 days from the date of commencement of the VAT Act, that is, before 1.2.20016.In the case of other goods, it is three years. Source:
Question: Will there be any Random Check of Accounts in case of Value Added Tax (VAT)?

Answer: Yes. The Commissioner of Commercial Taxes, may select assessments not exceeding 20% of total self assessments in the State for detailed check of accounts. The details of such selection shall be placed on notice board in the assessment circle and in the department websites The accounts which are selected for detailed check shall be called and checked by assessing authority. After check, the assessing authority either accept and confirm the self assessment already passed or revise the assessment. Source:
Question: What is the Remedy when the Assessing Authority makes provisional order disallowing the Input Tax Credit, on scrutiny of monthly return(s?

Answer: A revision petition may be filed to the Deputy Commissioner concerned, as in the TNGST Act, 1959. Source:
Question: Is there any provision for compounding system of tax under Value Added Tax (VAT)?

Answer: Yes there is. It is available for, on their option:-

1) The dealers who effects second and subsequent sale in the State. The Act provides tax not exceeding 1% as notified by Government on the turnover for the above dealers whose total turnover for a year is less than Rs. 50 lakhs. Government have notified this rate as 0.5%.

2) The Works contractors may opt to pay at compounded rates at 2% (civil), 4% (others) instead of paying tax at the rate prescribed for the goods involved.
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Question: How is the Value Added Tax (VAT) Certificate of Registration issued in Tamilnadu?

Answer: The Registered Authority shall acknowledge the receipt of application filed by the dealer. Thereafter, he shall issue certificate of registration within 30 days from the date of receipt of application. In order to speed up the process of registration one can utilise the e-services through web sites of the department, or or Source:
Question: Will there be Value Added Tax (VAT) Input Tax Credit for all Purchases?

Answer: No, It will be available only for local purchases from registered dealers, but not on goods taken for self-use/given as samples, gifted, lost in theft, fire, damaged or destroyed/all automobiles including two wheelers, three wheelers and their spare parts for repair or maintenance, air-conditioning units, refrigerators. Source:
Question: How is the method of calculation of determining the tax liability under the present Sales Tax system different from this Value Added Tax (VAT) method?

Answer: In the present Sales tax system, tax liability of a dealer for a particular period is determined using the multiplication method i.e. The taxable turnover of a dealer for a particular period is multiplied by the rate of tax applicable to that turnover. In VAT, the method adopted is Input Tax Credit method as stated above. This is the only difference between the present Sales Tax system and the VAT. Source:
Question: Can a dealer claim Value Added Tax (VAT) Input Tax Credit for goods sold in Inter-State trade?

Answer: Yes. It can be claimed only when those sales are effected to the Registered dealers of other State against Form C. Source:
Question: What is the Registration fee for Value Added Tax (VAT) Registration?

Answer: The registration fee for Value Added Tax (VAT) is Rs.500/- for principal place of business and Rs.50/- for each additional place of business. (Branches, Godowns). No Security Deposit is necessary for Registration, for dealers. There is no renewal of registration under VAT and it is permanent till it is cancelled by the Department or on stoppage of business when reported by the dealer. No security deposit is necessary for Registration. Source:
Question: What is the rate of tax for Capital Goods?

Answer: The rate of tax is 4% vide item no. Source:
Question: Whether claim of Value Added Tax (VAT) Input Tax Credit is on a One to One Basis?

Answer: No. The tax paid on purchases in a period can be deducted from tax payable on sale, whether such goods is sold or not during that particular period. Source:

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