Vat on mrp

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2016 Dear All,

One of my client "A Pvt Ltd." ( registered dealer in west bengal) purchase Food supplements & medicines from another dealer "B" in west bengal & pay VAT on MRP. Now the question is:-

1. If "A" sold these products in west bengal, then whether they have to collect VAT from customer & claim Input of VAT paid. I think this will be immaterial because VAT is already paid on MRP ??

2. If A Pvt Ltd. again sold these products outside West Bengal to their franchisee, then what will be the VAT implication? Whether franchisee will again collect VAT from their customer & pay to their state government??

3. If A pvt Ltd. transfer these goods to there own retail outlet outside West Bengal for sale? Then whether the retail outlet will again collect VAT from customer & paid to their state government?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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16 April 2016 In 1 Case Wholesellerwill charge Vat on MRP. So subsequent dealer Get input on MRP..

2. Interstate Sale CST is applicable not Vat , So Distributor Collect CSt instead of VAT , so Franchise will not get Input Tax benefit.

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2016 In case 2:- Whether franchisee need to collect VAT at the time of sale in their state & deposit to Government?

What will happen in Case 3??

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KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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16 April 2016 you have to colleact MRP Value but Franchise will not get in put Benefit.

in case 3 Goods will be Branch transfer without vat discharge vat in other state

End customer will not affect only Dealers will not get input in 2 and 3rd case

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2016 But Sir, In case 2 & 3 VAT is paid to government twice on same products. One in west Bengal & Another in the 2nd state..Is it viable??