21 December 2010
hi, I want to know that whether vat charged on basis value or after deduction of discount e.g. Mr A ( Retailer) sell a product situation A basic Price 1000 Less Discount 20% 200 Balance 800 Vat @ 5 % on 800 40 Total Value 840
situation B Basis price 1000 Less Discount 20% 200 Balance 800 Vat @ 5 % on 1000 50 Total Value 850 which situation is correct please suggest me this type of discount is cash discount or trade discount
21 December 2010
First one is correct.. VAT means Value Added Tax.. Value added in this question will be calculated based on 800/- as 200/- is already gone.
CAclubindia
