Understanding VAT Audit Limit

• VAT audit limit is the annual turnover threshold that mandates submission of a VAT audit report
  
• The audit report had to be filed by a registered dealer whose turnover exceeded the specified limit
  
• The audit ensured that the dealer’s books, VAT returns, and tax payments were accurate and verifiable
  
• Limits varied by state and were notified under the respective State VAT Acts or Rules
  
• Dealers below the threshold were generally not required to file a VAT audit report
  

States with ₹1 Crore Audit Limit

• Maharashtra – VAT audit was mandatory if turnover exceeded ₹1 crore; required Form 704
  
• Gujarat – Audit needed for turnover above ₹1 crore under VAT Act
  
• Rajasthan – Dealers with turnover exceeding ₹1 crore had to file audit report in prescribed format
  
• West Bengal – Audit required for dealers exceeding ₹1 crore in total turnover
  
• Karnataka – VAT audit report mandatory for dealers with turnover over ₹1 crore
  

States with ₹40 to ₹60 Lakh Audit Limit

• Kerala – Audit was mandatory for dealers with turnover above ₹60 lakh
  
• Punjab – VAT audit applicable for dealers exceeding ₹40 lakh turnover
  
• Uttarakhand – VAT audit threshold set at ₹40 lakh for registered dealers
  
• Assam – Dealers with turnover above ₹40 lakh were required to submit audit report
  
• Jharkhand – VAT audit compulsory for turnover above ₹50 lakh
  

States with Higher or Special Audit Limits

• Tamil Nadu – VAT audit mandatory for dealers with total turnover exceeding ₹1 crore
  
• Delhi – While audit was not always mandatory, scrutiny and assessment applied based on turnover
  
• Andhra Pradesh / Telangana – Audit needed for turnover over ₹1 crore
  
• Haryana – Dealers with turnover exceeding ₹1 crore required to file audit report
  
• Madhya Pradesh – VAT audit required beyond ₹40 lakh to ₹1 crore depending on category
  

Additional Points and Post-GST Scenario

• Post-GST, most VAT audit requirements ceased, except for legacy assessments and pending returns
  
• Audit reports were submitted in prescribed forms like Form 704, Form VAT-AR, or Annexures
  
• Penalties were levied for non-filing or late filing of audit reports
  
• Some states allowed electronic filing with digital signature verification
  
• Though GST replaced VAT, old VAT audit limits remain relevant for historical compliance and records