12 November 2013
The VAT is a tax on the sale and therefore it is lived on the sale price. Ordinarily sale price is the amount given to the seller for the value of the goods. But under VAT Act the words ‘sale price’ have been defined, as under - – ‘Sale price’ means the amount of valuable consideration paid or payable to a dealer for any sale made including any sum charged for anything done by the seller in respect of the goods at the time of or before delivery thereof, other than the cost of insurance for transit or of installation, when such cost is separately charged. Thus the definition of the ‘sale price’ suggests that it is not only the price of the goods, but includes the amounts charged by the seller for any thing done before the delivery of the goods. hence Vat is applicable.
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