Purchase from unregistered dealer-composition scheme

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 March 2013 Dear All,

My husband is doing a property developer. He enters in JD and develops the property.
he opted for composition scheme of VAT. I would now like to know should he collect the tax from his suppliers for sand bricks etc., who are unregistered dealers.

Thanks in advance

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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16 March 2013 Mrs Author,
Being a registered dealer he should collect VAT on all URD purchases,like sand ,grit,bricks etc. by raising self purchase bills(u/s 3/2).and pay it to the govt. After consuming them the same tax can be claimed back as input tax credit and the output tax payable can be reduced by that amount......mjk

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2013 Thank u for replying sir but my doubt is as he is opted for composition we can not take input of the vat paid on purchases.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2013 Dear All,
I would also like to know is the reverse charge mechanism applicable to us ..because ours is a partnership firm and not a body corporate.

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2013 Dear All,
I would also like to know is the reverse charge mechanism applicable to us ..because ours is a partnership firm and not a body corporate.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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17 March 2013 But the rule of collecting VAT on purchases made from URDs applies. As you are under composiiton scheme the benifit of ITC can not be available.....mjk

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Prakash Kochar

Prakash Kochar (Expert)
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18 March 2013 Provisions in different states are separate,for reply kindly inform the querry is related to which state. In Maharashtra there is no provision to collect the tax from supplier who are unregister and pay to Govt.on purchases.

Querist : Anonymous

Querist : Anonymous (Querist)

18 March 2013 This belongs to karnataka

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Prakash Kochar

Prakash Kochar (Expert)
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21 March 2013 Agrees with reply of shri M J Krishnamurthy Sir.