Vat itc
This query is : Resolved
renuka Mirji
(Querist)
26 September 2012
I have a query regarding Vat ITC which came up from a practical live example and is as follows:
A is a retail registered dealer who buys garments from B a fashion designer(unregistered dealer).According the contract between A and B, A will pay for the garments only if he manages to sell the garment to the final consumer.B agrees to sell the garments @ Rs 225 each to A.
A manages to sell one garment and pays only Rs 200 to B for it. i.e he charges B 12.5% Vat, why is it so???? Is he allowed to do so???
Since B is not charging vat to A why is A deducting the Vat amount from B's selling price???
Is A allowed to do so???
A is a retail registered dealer who buys garments from B a fashion designer(unregistered dealer).According the contract between A and B, A will pay for the garments only if he manages to sell the garment to the final consumer.B agrees to sell the garments @ Rs 225 each to A.
A manages to sell one garment and pays only Rs 200 to B for it. i.e he charges B 12.5% Vat, why is it so???? Is he allowed to do so???
Since B is not charging vat to A why is A deducting the Vat amount from B's selling price???
Is A allowed to do so???
Nitesh Parmar
(Expert)
27 September 2012
A can do so but on further sell to other party input will not be available to A.
renuka Mirji
(Querist)
27 September 2012
My query then would be that, On what grounds is A allowed to do so???
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