When calculating VAT and VAT Returns the following things were taken into consideration;

• Total sale and purchase of product, material or services across the three-month accounting period.
• The amount owed for the sales.
• The total amount reclaimed from a purchase made by the business.

If the amount owed was more than the amount reclaimed, then VAT was to be paid to the tax authority. But if the amount reclaimed exceeded the amount owed, then the tax authority covered the cost difference.

Filing for VAT Returns in India

After the registration of VAT was confirmed, one could file VAT Returns and pay the taxes online on the Commercial Taxes website of the respective state.

Requirements For e-Filing VAT Returns

There were certain pre-requisite conditions that had to be fulfilled before filing VAT Returns online. These were:

• TIN Number: Before starting the process of e-filing VAT Returns one had to acquire a Tax Identification Number (TIN). TIN was an 11-digit number that was issued by the tax department of the concerned state where the business establishment was located. All tax related subjects were tracked by the State Government by using the Tax Identification Number (this role is now served by the GSTIN under GST registration).
• User ID: After registration of VAT, the applicant received a User ID and password generated by the tax department. One had to use this ID to start the procedure of VAT Returns filing. An individual filing VAT Returns for the first time had to change the password immediately after logging into one’s account.
• e-Filing Software: One could file a VAT Return only with access to the e-filing software. The applicant could find the option to download this software after logging into his/her account. This software converted the data from the e-filing to XML which could later be uploaded on the online portal of the Directorate of Commercial Taxes.
• VAT Receipts: VAT receipts could be generated in respect of every transaction done via one’s account.

If these things were available and produced then the VAT filing took less time to fulfill. It was important to maintain a VAT account as a part of one’s record as it contained the details and statements of all tax progress including Output, Input tax, and VAT payments.

Steps that were followed for e-Filing VAT Returns:

• Step 1: Go to the online portal of the Directorate of Commercial Taxes of the respective state and log into the account. Since VAT came under the jurisdiction of the State Government, there were different online portals for each state.
• Step 2: After logging in, download the zipped 14D Form. Unzipping the file gave a PDF version of the form that needed to be filled along with the annexure.
• Step 3: The information required to fill the form was present in the VAT receipts and could be obtained from there. Filling these forms could take a few hours to a day depending on the number of transactions.
• Step 4: With the help of the software downloaded from the website of the Directorate of Commercial Taxes, the form was converted into XML. Then this XML file was uploaded with the annexure to the website.
• Step 5: The e-filing system was an intelligent system that checked for mistakes in the uploaded file. These mistakes had to be rectified and the form resubmitted on the website.
• Step 6: After the form was submitted, an acknowledgment receipt or VAT receipt was generated with respect to the VAT filed. This receipt acted as evidence that the VAT Returns for the month were filed.

The Advantages of Filing VAT Returns Online

Filing VAT Returns online was a much easier process than filing them manually and its benefits only increased with the growth of one’s business.

The advantages of filing VAT online were listed as follows:

1. e-filing was less tedious and less time-consuming. In a matter of clicks, the taxpayer received the form which could then be filled and uploaded. The whole process took only a few hours rather than a whole day when done manually.
2. All the details required were available on the taxpayer’s account. It also auto-checked documents and highlighted any infrequencies or mistakes in the submitted form.
3. If there was any information lacking, the State Government could contact the registered individual directly through his/her account. After being made aware of the requirements one could fill them and process payment on time.
4. The manual receipts could be misplaced but with the e-filing process the receipts were electronically generated and were always available in one’s account to be easily accessed anytime.

Common Issues that arose while Filing VAT Returns Online

Apart from the immense advantages of filing VAT Returns online, there were some minute glitches that taxpayers went through. In certain states like Meghalaya and Orissa, the websites had problems opening due to lack of infrastructure and non-availability of fast internet service.

E-filing made the whole procedure of submitting VAT Returns very easy, but due to the stringent timelines and penalties imposed it caused dissatisfaction amongst businessmen. With GST replacing VAT for most goods from 1 July 2017, return filing moved to the single national GST portal — see GST returns.

When calculating VAT and VAT Returns the following things were taken into consideration;

• Total sale and purchase of product, material or services across the three-month accounting period.
• The amount owed for the sales.
• The total amount reclaimed from a purchase made by the business.

If the amount owed was more than the amount reclaimed, then VAT was to be paid to the tax authority. But if the amount reclaimed exceeded the amount owed, then the tax authority covered the cost difference.

Filing for VAT Returns in India

After the registration of VAT was confirmed, one could file VAT Returns and pay the taxes online on the Commercial Taxes website of the respective state.

Requirements For e-Filing VAT Returns

There were certain pre-requisite conditions that had to be fulfilled before filing VAT Returns online. These were:

• TIN Number: Before starting the process of e-filing VAT Returns one had to acquire a Tax Identification Number (TIN). TIN was an 11-digit number that was issued by the tax department of the concerned state where the business establishment was located. All tax related subjects were tracked by the State Government by using the Tax Identification Number (this role is now served by the GSTIN under GST registration).
• User ID: After registration of VAT, the applicant received a User ID and password generated by the tax department. One had to use this ID to start the procedure of VAT Returns filing. An individual filing VAT Returns for the first time had to change the password immediately after logging into one’s account.
• e-Filing Software: One could file a VAT Return only with access to the e-filing software. The applicant could find the option to download this software after logging into his/her account. This software converted the data from the e-filing to XML which could later be uploaded on the online portal of the Directorate of Commercial Taxes.
• VAT Receipts: VAT receipts could be generated in respect of every transaction done via one’s account.

If these things were available and produced then the VAT filing took less time to fulfill. It was important to maintain a VAT account as a part of one’s record as it contained the details and statements of all tax progress including Output, Input tax, and VAT payments.

Steps that were followed for e-Filing VAT Returns:

• Step 1: Go to the online portal of the Directorate of Commercial Taxes of the respective state and log into the account. Since VAT came under the jurisdiction of the State Government, there were different online portals for each state.
• Step 2: After logging in, download the zipped 14D Form. Unzipping the file gave a PDF version of the form that needed to be filled along with the annexure.
• Step 3: The information required to fill the form was present in the VAT receipts and could be obtained from there. Filling these forms could take a few hours to a day depending on the number of transactions.
• Step 4: With the help of the software downloaded from the website of the Directorate of Commercial Taxes, the form was converted into XML. Then this XML file was uploaded with the annexure to the website.
• Step 5: The e-filing system was an intelligent system that checked for mistakes in the uploaded file. These mistakes had to be rectified and the form resubmitted on the website.
• Step 6: After the form was submitted, an acknowledgment receipt or VAT receipt was generated with respect to the VAT filed. This receipt acted as evidence that the VAT Returns for the month were filed.

The Advantages of Filing VAT Returns Online

Filing VAT Returns online was a much easier process than filing them manually and its benefits only increased with the growth of one’s business.

The advantages of filing VAT online were listed as follows:

1. e-filing was less tedious and less time-consuming. In a matter of clicks, the taxpayer received the form which could then be filled and uploaded. The whole process took only a few hours rather than a whole day when done manually.
2. All the details required were available on the taxpayer’s account. It also auto-checked documents and highlighted any infrequencies or mistakes in the submitted form.
3. If there was any information lacking, the State Government could contact the registered individual directly through his/her account. After being made aware of the requirements one could fill them and process payment on time.
4. The manual receipts could be misplaced but with the e-filing process the receipts were electronically generated and were always available in one’s account to be easily accessed anytime.

Common Issues that arose while Filing VAT Returns Online

Apart from the immense advantages of filing VAT Returns online, there were some minute glitches that taxpayers went through. In certain states like Meghalaya and Orissa, the websites had problems opening due to lack of infrastructure and non-availability of fast internet service.

E-filing made the whole procedure of submitting VAT Returns very easy, but due to the stringent timelines and penalties imposed it caused dissatisfaction amongst businessmen. With GST replacing VAT for most goods from 1 July 2017, return filing moved to the single national GST portal — see GST returns.