1. Applicability of Karnataka VAT (KVAT) audit for the FY 2017-18As per the KVAT Act 2003, a dealer is liable for a VAT audit when his turnover exceeds Rupees 1 Crore in a financial year. Additionally, the Commercial Tax Department of Karnataka (CTDK) vide Notification No. FD 53 CSL, 2018 dated 29/09/2018 have extended VAT audit requirement to those dealers who have a turnover between Rs.25 Lakhs to Rs 1 Crore during the first three months of FY 2017-18.
2. Form and Due Date of KVAT audit for the FY 2017-18Vat Audit is required to be filed in the form VAT 240 and the due date for filing the same is as follows:
|Turnover (April to June 17)||Due Date|
|25,00,000 to 1,00,00,000||31st March 2019|
|1,00,00,000 and above||31st December 2018|
3. Specific points to be noted for 2017-18 KVAT audita. Audited Financial Statements have to be bifurcated into two periods – Pre GST period for the conduct of VAT audit and Post GST Period for the conduct of GST Audit; b. Records to be maintained to ensure that the entire years turnover has been rightly declared under the VAT or under the GST returns and tax appropriately discharged; c. Special focus should be on transition issues and cut off procedures like
i. Closing Balance of VAT credit should have been carried forward to GST by filing TRAN 1 credit;
ii. In case the dealer has not received statutory forms (Form C, Form H, etc.) against sales made at the concessional rate then the credit to be carried forward to GST should be restricted to the extent of tax payable on such pending Forms;
iii. Sales Returns of goods sold under VAT Regime from a registered person- Returns will be treated as supplies in the hands of the purchaser and he is required to charge GST on the same;
iv. Sales Returns of goods sold under VAT Regime from an unregistered person – Seller required to claim a refund of the VATd. Liability identified under the VAT audit needs to be discharged before filing the Form VAT 240.