APPLICABILITY OF MONTHLY RETURN UP VAT ON PETROLEUM PRODUCTS OR CNG PRODUCTS

[CA C M JAIN]

Will Petrol Pump owner file monthly return under UP VAT Laws. On monthly sale and purchase, tax shall be levied on outward supplies after considering tax on inward supplies. Please guide the same.

[YAGAY andSUN]

Yes. A petrol pump dealer dealing in petrol, diesel, or CNG in Uttar Pradesh is generally liable to comply with the provisions of the erstwhile Uttar Pradesh Value Added Tax Act, 2008 for those petroleum products which are still outside GST.

Under UP VAT, petroleum products such as petrol, diesel and certain petroleum products were taxable goods, and dealers were required to file periodic VAT returns (monthly or quarterly depending upon turnover/category).

Whether monthly return is required?

If the dealer is registered under UP VAT and falls under the category prescribed for monthly filing, then monthly VAT return was/is required to be filed in Form VAT-24 (UPVAT XXIV).

How is VAT liability calculated?

VAT works on the principle:

Output Tax (on sales)
LESS: Input Tax Credit (on purchases)
= Net VAT Payable

Thus, on monthly sales and purchases:

• VAT is charged on outward taxable sales of petrol/CNG etc.
• Credit of VAT paid on eligible inward purchases can be adjusted against output VAT liability.
• Balance tax is payable to the department.

This is the normal VAT mechanism.

Important point for petroleum dealers

Input Tax Credit (ITC) is available only where specifically allowed under the VAT law. Certain restrictions apply to petroleum products and related purchases. Courts and VAT provisions have discussed that ITC on petroleum products may be restricted in specified situations.

Present practical position

After implementation of GST from 01.07.2017:

• Petrol and diesel are still outside GST.
• States continue to levy VAT on these products.
• Petrol pumps generally continue compliance under state VAT laws for petroleum products.
• GST applies separately on non-petroleum items/services sold at the pump (lubricants, shop items, services etc.).

In short

• Yes, a petrol pump owner registered under UP VAT is/was required to file VAT returns.
• VAT liability is calculated after adjusting eligible input tax credit against output tax.
• Monthly return applicability depends on the dealer category/turnover prescribed under UP VAT Rules.

 

AI Summary

Value added tax compliance for petrol pump dealers continues for petroleum products outside GST, with monthly returns and input credit rules. Petrol pump dealers dealing in petrol, diesel or CNG in Uttar Pradesh remain subject to VAT compliance for petroleum products outside GST. If registered under the Uttar Pradesh VAT regime and required to file periodically, monthly return filing may apply according to turnover or classification. VAT liability is computed by reducing eligible input tax credit from output tax on sales, subject to statutory restrictions on input credit for petroleum-related purchases.