COMPOSITION SCHEME FOR BAKERS UNDER MVAT Act, 2002.

VAT Composition Scheme for Retailers under MVAT

COMPOSITION SCHEME FOR BAKERS UNDER MVAT Act, 2002.
Scheme for Bakers
Composition scheme under VAT regime can be said to be a simplified scheme for calculating, charging, collection and payment of sales/vat tax. The basic idea of introducing the scheme is to enable small business men in resale and retails business to carry business without maintaining detailed accounts, enabling easy calculation of tax payable by them. This saves them from rigors of regular scheme under MVAT law. Section 42(1) of Maharashtra Value Added Tax Act, 2002 (MVAT, 2002) empowers State Government to Notify Composition Scheme for dealers in State of Maharashtra who are engaged in business of resale and retail. State Government has notified Composition Scheme vide notification No. VAT-1505/CR-105/Taxation-1 dated 1st June 2005 and amended form time to time.
Separate scheme have been notified in the above mentioned notification as applicable to:

1. Restaurants, Eating House, Refreshment Room, Boarding Establishment, Factory Canteen, Clubs, Hotels and Caterers 
2. Bakers 
3. Retailers 
4. Dealers in Second-hand Motor Vehicles

Composition Scheme under section 42(1) shall not apply to a dealer

1. who is a manufacturer or 
2. who is an importer or 
3. who purchases any goods from a registered dealer whose sales of the said goods are not liable to tax by virtue of the provisions contained in sub-section (1) of section 8 or 
4. who sells at retail liquor including liquor imported from out of India, Indian Made Foreign Liquor or Country Liquor except as provided in sub-section (2)

Scheme as Applicable to Bakers
(a) What are class of sales and purchases which are eligible for enabling benefit under this scheme ?

>Aggregate of Sales of bakery products which are manufactured by the baker himself

(b) What is Composition Amount Payable (Tax payable)

1. 4% of the first Fifty Lakh rupee of the total turnover of sales of goods referred above in (a) goods imported out of  Maharashtra State, if any, including bread in loaf, rolls, or in slices, toasted or otherwise, 
2. in the case of a registered dealer and 6 per cent. of the first Fifty Lakh rupee of the total turnover of sales of goods referred to in (a) above and goods imported out of Maharashtra State, if any including bread in loaf, rolls, or in slices, toasted or otherwise

(c) Conditions in which this scheme will be applicable to retailers

1. The claimant dealer shall be certified by the Joint Commissioner for the purpose of claiming benefit under this entry, 
2. The claimant dealer shall not be entitled to claim any set off under the MVAT Rules, in respect of the purchases corresponding to any goods which are sold or resold or used in packing of goods referred in (a) above, 
3. The turnover of sales of bakery products including bread has not exceeded rupees Fifty Lakh in the year previous to which the composition is availed and if the dealer was not liable for registration under the BST Act, 1959 or under MVAT Act, 2002, in the immediately preceding year, then he shall be entitled to claim the benefit of the scheme in respect of the first Fifty Lakh rupees of the total turnover of sales in the current year,
4. The claimant dealer shall apply in the ‘Form-3’ appended to this notification to Joint Commissioner of Sales Tax (Registration) in case of dealers in Mumbai and in other Cases with Joint Commissioner of Sales Tax (VAT Administration), 
5. The to join composition will effective from the date of registration if the dealer applies for Composition Scheme at the time of Registration,  
6. If the Dealer opts for Composition Scheme form 1st April, 2011 he shall apply from on or before 30th June 2011,
7. If the Dealer opts for composition at any time on or after 1st April of any year then the option shall be effective only form the beginning of next financial year,
8. The application should be made to the assessing authority who was in charge of the case on 31st March 2005 before 15th June 2005 or as the case may be, to the registering authority at the time of application for Registration Certificate under the Act,
9. Subject to condition (iii), if the option to join the composition scheme is exercised, in any year then it can be changed only at the beginning of the next year,
10. The claimant dealer shall not be eligible to issue ‘Tax Invoice’ in respect of sales of goods referred in (a) above,
11. The claimant dealer shall not be eligible to recover the composition amount from any customer separately,
12. Before 1st April 2011 the turnover limits were Rupees Thirty Lakhs

VAT Composition Scheme for Retailers under MVAT

See Terminology of terms used under MVAT Act, 2002 for meaning of resale, importer, manufacture, registered dealer, tax free goods,
Due dates for filing Vat Returns-Maharashtra.
Interest Payable by Dealer under MVAT Act and Rate of Interest
Composition Scheme for Work Contract In Maharashtra Value Added Tax 2002 (MVAT Act, 2002)