Changes in Form-704- Version 2.0.0-An Analysis CA Mayur R. Parekh

In this article I have tried to analyze changes made in Form-704 Version-2.0.0 introduced vide Notification No. VAT/AMD/2013/1B/ADM-8 dated 23-08-2013.

I] Letter Of Submission

A] Under this dealer is expected to give details of VAT/CST paid based on his acceptance of VAT Auditor’s Recommendations.

B] Under earlier version of form 704 version 1.3.0 the dealer was supposed to submit Balance sheet, Profit & Loss a/c, Statutory/ Tax Audit Report, Trial Balance in case of Multi-State activities and Part-I of e-704 duly signed by the VAT Auditor as it was called for by way of enclosures under letter of submission and Part-I. However, by way of Trade Circular 16-T of 2011, date-11/11/2011 Filling Of Audit Report in Form 704 electronically for the period 01-04-2010-31-03-2011 the requirement for submission of Balance sheet, Profit & loss a/c, Statutory/Tax Audit Report and Trial Balance in case of Multi State activities was done away with and dealer was only required to submit :
i)  A statement of submission of audit report in the format given in the Circular dated 1/10/2009.
ii) A duly signed copy of Acknowledgement generated after uploading of audit report in form 704.
iii) A copy of Part-I of the form-e-704 alongwith, certification duly signed by the Auditor.
But now under new version of Form-704 they have deleted “Enclosures” in Letter of Submission as well as in Part-I. But however as per instruction no.27 dealer is required to submit
i)  A statement of submission of audit report duly signed by the Dealer.
ii) A duly signed copy of Acknowledgement generated after uploading of audit report in form 704.

It seems that requirement of submission of copy of Part-I of Form e-704 along with certification duly signed by the VAT Auditor is inadvertently being removed which is the main crux of Form e-704. I hope that sales tax department may come out with clarification for the same by way of trade circular.
1] In serial no. I (A) the word “ we hereby annex a copy of our/their Tax Audit report dated along with all the annexures to those reports and copies each of the audited (*) Profit And Loss Account / Income And Expenditure Account for the year ended on” has been replaced with the word “ We have taken on record Tax Audit Report dated along with all the annexures to those reports and copies each of the audited (*) Profit And Loss Account / Income And Expenditure Account for the year ended on”
2] In serial no. 1(B) & 1(c) the words “And annexed here with” are removed.
3] In table-1, serial no.5(a)(ii) return in form 424 is inserted along with form 405.

Under certification part the following changes have been made :

a) In table-1, serial no. 2(B)(b) the selection of schedules and annexures as applicable to the dealer, annexure J-3 and j-4 have been removed.

b) In table-1,serial no.2(B) clause (c) & (d) are clubbed as clause (c).

c) Clause (d) and clause 7 below table 5 are newly introduced as “on the basis of an information available on the website of department the period under audit involves no issue in case of this dealer in which a decision against the State Government or the Commissioner was delivered by the Tribunal and the Reference and/or Appeal therein is pending before appropriate forum except detailed in table 7 herein below, if applicable.

                This clause has been inserted by virtue of section 23(8) of MVAT Act,2002. But according to me this is Herculeun  task cast on the VAT auditor which is not practical as well as justifiable. It is a job of Assessing officer and not VAT Auditor. If references/appeals are filed by the State Government or the Commissioner before appropriate forum  it is the Assessing officer who must be aware about the same. But the VAT Auditor is not supposed to certify of references/appeals  filed by the State Government or Commissioner in respect of similar matter pertaining to auditee. Presently, 863 references/appeals  have been filed by the State Government or the Commissioner before appropriate forum as listed on MAHAVAT  Website. To certify the said matter every VAT Auditor must go through all references/appeals  filed which is practically not possible and feasible. The said list of references/appeals  will also be updated on regular basis on MAHAVAT Website then how VAT Auditor will keep track of the same while signing VAT Audit Report. At the most if legislature wants VAT Auditor to certify the said matter than it should be restricted to only references/appeals  filed by the State Government or the Commissioner in respect of auditee only and not in general.

              Under clause 7 below Table-5 a table has also been inserted wherein details of references/appeals have been  filed by the State Government or the Commissioner in case of similar issue is involved  in the case of dealer under Audit where a decision against State Government or the Commissioner was given by the Tribunal and the references/appeals are pending before the appropriate forum as listed on MAHAVAT Website  have to be furnished in the said clause.
      d] Enclosures at the end of Part 1 are deleted.

a)   In Serial No. 3Computation of Purchases  eligible for set-off

 Under  clause (j) deduction from Total Turnover of Purchases regarding Purchases within the State of Maharashtra from unregistered dealers exclusion has been made for Purchases from unregistered dealer liable for Purchase Tax.
                The said changes has been made due to insertion of section 6A and 6B w.e.f. 01-05-2012 wherein Purchase tax will be payable on Purchase of cotton or oil seeds respectively from unregistered dealer and transferred to OMS Branches or Agents or used  in manufacturing of tax free goods or taxable goods & goods so manufactured are transferred to OMS Branches or Agents.

b) In Serial no. 3 clause-O, for Balance Taxable Purchases eligible for set-off, instead of word “Balance- within the State Purchases of Taxable Goods from registered dealers eligible for Set-off” the words “from registered dealer” are removed. The said changes have also been made in Serial No – 5 clause (a) –Table for Computation of set-off claimed for the period under audit.
Similarly, the abovementioned changes have also been made in Schedule – III, IV and V.

This changes was required to give effect to allow set-off on Purchase Tax payable/paid. But according to me may be inadvertently, Table is not provided for calculation of Tax rate wise breakup of Purchases liable for Purchase tax as well as Tax rate wise breakup of Purchases eligible for set-off liable for Purchase Tax. Due to this mismatch of figure will occur between Serial No. 3 clause - O and Serial No. 4.

c) Under Serial No. 6B clause - (a1) has been newly inserted to provide for Purchase Tax payable.
     The said changes have also been made in Schedules  III, IV and V.

d)      Under Serial No. 6B clause (f1) has been newly inserted to provide for any other  e.g. Purchase Tax, Late fee (please specify).

     The said changes have also been made in Schedules III, IV and V.

     According to me the word “Purchase Tax” should not come here as specific clause (a1) has been inserted for the same. Regarding late fee the said changes has been made due to introduction of sub-section (6) of section 20 was made by Maharashtra Value Added Tax Act No. 8 of 2012, dt. 25-04-2012 w.e.f. 01-08-2012 as per Notification No. VAT/152/C.R. 65/ Taxation-1, dt 04-07-2012.


      Instead of heading “Computation of Set-off claim on the basis of tax paid Purchases effected from Registered Dealers” it has been replaced with “Computation of Set-off claim on the basis of Tax Paid Purchases”.

       The said changes have been made to give effect to allow set-off on Purchase Tax Payable/Paid on URD Purchases as applicable.
a] Section 1: Heading “ Total Tax Paid Purchases Effected From The Local Supplier During The Period Under Audit  (Including Capital Assets) ” has been replaced with “ Total Tax Paid And URD Purchases Effected From The Local Supplier During The Period Under Audit  (Including Capital Assets) and total purchase tax paid ”.
       New row has also been inserted to incorporate purchase tax payable.
b] Section 2:
New row has been inserted to incorporate purchase of taxable goods from registered dealer on which set-off is not claimed.
                          I failed to understand why such details was incorporated. When dealer has not claimed the set-off on purchases why such details are being called off. Here the question may also arise whether any  expenses in the nature of purchases on which set-off is not claimed the details of the same are to be given or still clarification given by the Honorable Commissioner in Trade Circular No. 26T of 2006 dated  18-09-2006 will prevail.

C] Section 4 : The row no. 3 under old form-704 has been divided into row no.3- sub rule  53(3)(a) Branch transfer and sub rule 53(3)(b) Branch transfer (D-schedule goods) in new form 704 to provide details of retention.
d] Section 5 : The new row has been provided to furnish details of total tax paid purchases effected from registered dealers on which set-off is calculated and allowed under Rule 52A and Rule 55B along with Rule 52.

V] Annexure G: Additional rows are inserted upto 5000 in place of 1000.

VI] Annexure I: Additional rows are inserted upto 5000 in place of 1000.

VII] Annexure J1 & J2: Additional rows are inserted upto 5000 in place of 1000.

VIII] Annexure J3 & J4: Both the annexure have been removed in new form 704. According to me it was not required because it was convenient for both the Sales Tax Department and the Tax practitioner to know about the details of debit note & credit note pertaining to goods return, rate difference etc and to cross verify GTO of sales and purchases with respective schedules.

               Friends, in this article I have tried to incorporate and analyze the changes in new Form 704 Version 2.0.0. Please pardon me if any of the changes have not been incorporated herein above.




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SECURITIES (MNP) (TDS)2007-08 ` 01.07.12 01.09.2008 01.10.2012 06.07.2009 07.08.2012 1 PERCENT EXCISE ITEMS LIST 1 sep 1% excise 10 year nsc 10(10C) 1000 court cases judgements supplied to ITO 1000 rupee note 11-2008 11-2010 130 items 14.08.2008 15 august 150 Rs coin 15g 15h 18-12-2009 192(1A) 192A 194 I 194A 194c from 01.10.2009 194H 194j 194LC 1981-2007 2% cst 2% excise 2004 2008 2008-09 FY 2010 206AA 234A 234B 234C 234c interest calculator 234E 23AC 23ACA 23B 24C 24q annexure II 25 paisa coin 271(1)(c) 271B 271H 272B 27A 280 280 challan 281 282 283 29 AUGUST 29.04.2010. 29/08/2008 29/2008 service tax 2g meaning use 3 idiots 30 MARCH 31st March 32-2010 33 of 2009 35(2AA) 35(2AB) 3CD 3g meaning use 40(b) 43B 44 AB EXEMPTED INCOME 44AA 44AB AGRICULTURE 44AB new limit 44AB NON RESIDENT 44ad 46/2012 45/2012 49C 5 day week 5 years post office deposit 5/2011 50 paisa coin 54b 54EC 54ee 54f 54gb 5th paycommission punjab 6 % excise 6 crore advance limit 6/2005 69/2010 6th cpc 6TH PAY COMMISSION 70% of pan etds 7th Central Pay Commission 8 tips to save tax 80C 80ccc 80CCD 80cce 80CCF 80CCG 80d 80DDB 80EE 80G 80GG 80GGA 80GGB 80ggc 80tta 80U 85% of pan etds 86/2008 DATED 13-08-2008 87A rebate 89(1) 89(1) relief calculator 9.5 % rate for private epf 92E 95% of pan etds 98 dated 04/01/08 aadhaar aakash tablet aam admi aar Aayakar Sampark Kendra abatement abolished ACCOUNT PAYEE DRAFT Accounting ACCOUNTING CODE accounting code for services ACCOUNTING FOR GOVT GRANTS accounting standards ACES ADD IN Add-Ins additional relief in budget 2010 adjustment of advance FBT with advance Tax advance rullings advance salary ADVANCE TAX CALCULATOR advance tax challan ADVANCE TAX CUT OFF AMOUNT ADVANCE TAX DATES AFFIDAVIT AG Projects Technologies Ltd RT age 80 addition pension aibea wage revision aibea wage revision latest news aiboa aiboc aiboc wage revision AIG AIR airline ticket booking tds airlines all is well allowances allownces alphabet of inspiration alteration on check allowed alternate minimum tax AMENDED 3CD amendment in companies bill 2011 amendment in gratuity act 2010 amendment in registration service tax AMENDMENT IN SERVICE TAX ON RENT amendment to finance Bill 2010 AMNESTY SCHEME 2007 amt Anna Hazare anna hazzare bill vs govt lokpal bill appeal apply for new pan card against old pan card aqb arbitration arrears of salary arrears of sixth pay ARRERS TAX AS-12 ASBA assessee in default ASSESSMENT REOPENING ASSESSMENT YEAR 2008-09 REFUND atm atm 100 per day atm cash without card atm tips atm wrong debit audit cases itr filing audit limit enhanced Audit Questionaire AUDIT REPORT AUS VS IND.INDIA VS SL Automated teller machine AUTOMATION OF CENTRAL EXCISE AND SERVICE TAX ay 2010-11 bad debts Bank Bank account bank audit bank audit 2012 bank charges BANK SALARY bank strike 06/07/09 and 07/07/09 banking law amendment banknotes banks npa provisioning BARE ACT bare rules BASE RATE BY BANKS bcct BIMAL JAIN biometric pan card black and white form not 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capital asset capital formation huf Capital gain capital gain account scheme 1988 CAPITAL GAIN INDEX capital gain on repayment of loan capital gain on tenancy rights capital goods capital revenue CAPITAL SUBSIDY CAR LOAN RATE INCREASE carry forward of losses in late return cas cash flow statement CASH PAYMENT DIS ALLOWANCE CASH PAYMENTS EXCEEDING 20000 CASH SUBSIDY cbdt cbec CBI ARRESTED centeral sales tax rate CENTRAL PAY COMMISSION CENTRAL PROCESSING CENTER CENTRALISED PROCESSING OF RETURNS Cenvat CENVAT Credit Rules cgas 1988 challan challan 281 CHALLAN 289 challan correction challan Form 17 CHALLAN STATUS INQUIRY change change in cst rate change in excise duty rates CHANGE IN PAN ADDRESS CHANGE IN PAN DATA change in tds rates in budget changes CHANGES IN SERVICE TAX ACT changes in new itr forms CHANGES IN TDS CHARGES ON CASH PAYMENT OF CREDIT CARD BILL charitable organisation check name from PAN check tds deducted online Cheque cheque bounce cheque payment before due date cheque tender date /realisation date Cheque Truncation CHEQUE VALIDITY child care leave CHILD DEPENDENT PREMIUM CHILD MARRIED PREMIUM child plan childeren name children education allownces chip based atm card cibil cibil for companies CII 2007-08 CII 2008-09 CII 2010 cii 2012-13 CII2011-12 cin CIRCULAR 3/2010 DT 2.03.2010 CIRCULAR 8-2010 CIT v. Emilio Ruiz Berdejo (2010) 320 ITR 190 (Bom.) cloning of atm card clubbing of income COLLECTION CHARGES COLOR SCHEME COMMISSION ON SMALL SAVINGS common error in 2009-10 common error in itr 4-5-6 compa companies bill 2012 COMPANIES RATE COMPANY BILL 2011 company deposit Company Law Settlement Scheme COMPANY REGISTRATION complusory payment of taxes Composition scheme service tax COMPUTER AS FAX MACHINE computer sytem at ito office CONCEPT PAPER configure yahoo mail in outlook express consolidate account statement construction purchase of house Consultancy Service Consumer Price Index continues services CONTRIBUTION TO NEW PENSION SCHEME CONTRIBUTORY PENSION FUND CONVERT FIGURES INTO WORD EXCEL COPARCENER CorpMcash corporation bank correction etds CORRECTION IN PAN DATA correction in section CORRECTION RETURN CORRECTION RETURN.ETDS cost accounting cost audit cost inflation index cost inflation index 2012-13 COST INFLATION INDEX FY 2010-11 COST INFLATION INDEX FY 2011-12 COST OF INDEXATION CALCULATOR court case in entry tax punjab cpc phone number cpf Credit card CREDIT CARD BILL PAYMENT ICICI BANK credit scores cricket team critical illness CROSSED DEMAND DRAFT CRR crr reducred CS DIVESH GOYAL CST CST 3% OR 2 % cst act 1956 cst form CST FORM STATUS cst rate changed CST REDUCE RATE ctt currency CURRENCY TRADING ILLEGAL custom custom changes in budget cusual leave DA MERGE da rate da rate 01.07.2012 da rate january 2013 da rate july 2012 da rate wef 01.01.2012 date extension DDO ASK RENT RECIPT ddt dearness allowance Debit card DEBT EQUITY RATIO debt funds debt trap declared goods DEDUCTION 80C deduction for higher studies deduction on saving bank interst deduction u/s 80DD Deemed income of employee deemed services defective return defence officers defence pay defence pay scales DELAY IN FILING delete ledger in tally DELHI HIGH COURT demat deposit tax of two quarter in single challan depreciation depreciation on car depreciation on commercial vehicle. DEPRECIATION ON INTANGIBLE ASSETS depreciation rate depreciation rate 2009-10 DETAIL AFTER E FILLING DETAIL OF TIN Determination of value DIFFRENT TYPE OF TAXES digital signature din direct payment in bank account DIRECT SUBSIDY direct tax bill direct tax changes in budget direct tax code direct tax code 2009 Disability insurance discussion Paper distribution of salary dividend distribution tax dividend striping dnd do not call. document identification number document ientification number documents required for service tax registration domestic transfer pricing donation dot double taxation dow jones download download 89(1) relief calculator download direct tax code 2012 download form 16A download fvu download idfc INFRA BONDS FORM draft reply drawback rates dtaa dtc DUE DATE AY 2010-11 due date ay 2011-12 due date extended due date extended to 31.08.2012. due date for service tax return due date form 16 due date form 16a due date June due date march tax due date of return 2008-09 due date pf esi due date to deposit tds DUE DATES DUE DATES CALENDAR DUE DATES CALENDER DUE DATES INCOME TAX DUE DATES SERVICE TAX DUE FAMILY PENSION DULICATE PAN DUPLICATE TAN dvat e book Income Tax rules e book on service tax E ERA OF TAXES e filing do and don'ts e filing of audit report e filing processing status e filing software excel free e filing through evc e filing utilities e mode for notice to shareholder e notice to share holder e payment of epf E PAYMENT OF EXCISE DUTY e payment of income tax E PAYMENT OF SERVICE TAX e payment of tds E STAMP DUTY e tutorial for TAN registration E-1 FORM E-1 SALE e-commerce E-FILE SERVICE TAX RETURN e-Intermediary e-payment from friends account E-PAYMENT OF SERVICE TAX e-payment of taxes E-SEVA BY ICAI e-TDS/TCS statements earn from home earned leave Easy Exit Scheme ebay EBOOK EBOOK ON SERVICE TAX economic survey economic survey 2010 economic survey 2011 economic survey 2012 Edible Oils EDITABLE INCOME TAX FORM education cess EDUCATION LOAN eet EFFECTIVE DATE CST RATE REDUCTION effective date of allowncs efiling errors efiling free efiling income tax return efiling of excise return efiling registration problem Electricity act ELECTRONIC FOREX TRADING Electronic Verification Code (EVC) elegent card on holi ELSS EMANAGEMENT OF TAXES EMI CALCULATOR empanelment as branch auditor EMPLOYEE PROVIDENT FUND employee state insurance employee state insurance act 1948 employee state insurance act Limit employer e sewa eMudhra Consumer Services entries r off in 50 paisa entries rounded off in rs ENTRY TAX entry tax punjab epf epf challan epf claim