07 December 2010
An authorized service station of car provide service to customer, but the spare parts which are replaced under warranty provided free of cost to customer and the same is recovered from the supplier Further supplier has been returned only the cost of the part not the selling price
whether sales tax will charge to supplier on recovery amount
Also i want to know what tax planning we can do to save the tax can we show as agent and principal transaction
08 December 2010
Some CTO's can accept the warranty claim as free of cost. but, some CTO's object the warranty claim is a part of sales. you are collecting the money from Company instead of customer. so, it is treated as sales. Hence, if you want to escape from this problem, you better to receive the letter from company for warranty claim is a stock transfer, amounting without affect VAT on transfer and you must raise and show the 0% vat output bill for such case to CTO.
CAclubindia
