Mismatch Report after filing the DVAT Return
Mismatch Under DVAT in Annexure 2A & 2B
Annexure 2A & 2B are part of Form DVAT 16 by which Purchases/Sales are automatically filled in Form DVAT- 16 and Form- 1. DVAT Return is filed quarterly and Annexure 2A & 2B are also filed along with the VAT Return. Details filed in Annexure 2A/2B is dealer wise and not invoice wise. The details so filed are cross checked across dealers whose TIN is mentioned in the return and a mismatch report (2A) is generated. The buyer can view the report on the website of department immediately after filing of Annexure 2B by corresponding sellers.
Brief about the Annexure 2A & 2B is as follows:
Annexure 2A: All Types of Purchases, whether local, central or import is shown in Annexure 2A.
Annexure 2B: All Types of Sales, whether local, central or export is shown in Annexure 2B.
Types of Mismatch : After assessment of Annexure 2A and 2B, following types of result get displayed:
Type 1: No Mismatch
Type 2: Mismatch
Difference in the amount of Sales and Purchases shown by the selling and the purchasing dealer in their respective returns.·
Filing the Annexure 2A/2B with wrong rate of taxes.
Type 3: Not Reflected in Annexure 2B of Selling Dealers.
TIN not mentioned or quoting the wrong TIN by Selling Dealer.
Invoice not entered by any of the dealer either purchasing or selling the goods
Claiming input tax credit on retail invoices.
Above, reasons for Mismatch have been described below:
Type 2: Mismatch
1) Difference in the amount of Sales and Purchases: This may happen because of the following reasons:
Typing mistake: It may be possible that the Selling Dealer has shown lesser amount of sales in Annexure 2B due to typing mistake but the Buying Dealer shows the correct (more) amount of purchases in Annexure 2A. Thus, Buying Dealer has claimed more input and he will be penalised for no default on his part. However, in reverse case i.e. Selling Dealer having shown more amount of sales in Annexure 2B and the purchase amount being correctly entered by the Buying Dealer, the mismatch report will be generated without any penalty being levied on buyer.
Feed the data in return carefully.
Sales /Purchases shown in next month: This type of problem mainly occurs in case of invoices with the last date of the tax period as the invoice date or on receipt of invoices after the last date of the tax period to which such invoice pertains.
Similarly, it may be possible that Buying Dealer does not claim the input tax on the purchases made by him due to invoice being received after filling the return, which gives rise to mismatch as excess input taken in the next month.
To avoid this mistake, seller should issue the invoice timely and back dated invoice should not be issued.
But now there is a column in Annexure 2A which asks whether this purchase relates to previous quarter. Thus they can avoid this mismatch by filling this column.
- Sales Return /Purchase Return: Annexure 2C and Annexure 2D are for local Purchase Return and local Sales Return re
spectively but these are not linked with VAT return which implies that the dealer have to show the amount of Sales return or Purchase return in Form DVAT-16. Sometimes, seller shows the net amount of sales in Annexure 2B but buyer shows the gross amount of purchases in Annexure 2A and purchase return in Annexure 2D and also show the amount of purchase return in DVAT -16 ,thus when cross checking of the Annexure 2A of buyer and Annexure 2B of seller is done, mismatch arises and vice-versa.
2) Filing the Annexure 2A/2B with wrong rate of taxes: This type of error occurs due to products having multiple tax rates purchased from a single dealer or issue of one invoice for multiple tax rated products.
Check the invoice properly and feed the data in return carefully.
Type 3: Not Reflected in Annexure 2B of Selling Dealers
1) TIN not mentioned or quoting the wrong TIN: If TIN is not mentioned or wrong TIN is mentioned by the seller in Annexure 2B or by the buyer in Annexure 2A, then there will be mismatch in buyer’s account & buyer will be liable for penalty because wrong input has been taken by him.
Before filing the return, verify the TIN of Dealer on DVAT site.
2) Invoice not entered: If seller does not show the sale invoice in Annexure 2B but buyer has already shown the purchase invoice in Annexure 2A, more input has been claimed by the buyer that has not been passed by seller giving rise to mismatch report. In this case, buyer will be penalised for no default on his part but if this would be the reverse case, the mismatch report will be generated without any penalty being levied on the buyer.
Feed the data in return carefully and before submitting the return, check whether all invoices have been entered or not.
3) Claiming wrong input on retail invoices: Sometimes, Input tax credit is taken on tax charged on retail invoice and thus wrong input claimed on retail invoice will result in mismatch.
Check the invoice properly and if it is tax Invoice and TIN of both dealers is mentioned on the same, only then input should be taken by the buyer.
Correction of above Deficiency u/s 28 of the DVAT ACT, 2004: To correct the deficiency, dealer has to revise the Form DVAT -16 along with explanatory note specifying the mistake or error for which a revised return has to be filed. Time period to revise the return is within one year from the end of the financial year of tax period to which the original return relates. However, if because of deficiency, tax liability arises then dealer has to pay tax along with interest.
It is advisable to take care in filing the Return and if there is mistake on buyer’s side, then he has to revise the return and if mistake is on seller’s side, then communicate to the seller to revise the return.
Amount of Penalty u/s 86(10) of the DVAT ACT, 2004: Rs.10,000 or amount of tax deficiency whichever is more.
If there is no mistake and still mismatch comes, then file objection in form DVAT-38 u/s 74 of the DVAT Act, 2004..
Post written by CA Usha Garg.
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