Assessable value for VAT

This query is : Resolved

RAJ KUMAR NAHATA (Querist)
Follow

31 December 2007 A factory is producing some excisable goods. It is billing in two manners a) for customers availing modvat credit and b) for customers not availing modvat credit.
'A' 'B'
Basic price 10000 10000
Excise duty @ 16% 1600 1600
E. cess & SHED @ 3% 48 48
_______ _______
Sub Total 11648 11648
VAT @ 4% 466 402
_______ _______
Total 12114 12050
Less :- Cenvat 1600
_______ _______
Net payable 12114 10450

In situation 'A' - VAT is charged on total of Basic price & BED whereas in situation 'B' VAT is charged on Basic price & E.cess as the entire duty has been refunded to the customer. Whether the treatment is correct ?

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
Follow

02 January 2008 Nahata Ji,

I have a doubt, whether u are eligible for offering CENVAT to purchasers? I think your question ned o be rearranged. However as regards taxability under vat law in Assam is made very my\uch clear in section 2(44), which is being reproduced below. I will invite your attention on the 2nd para of explanation-II.

2(44)"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 dealer in respect of goods at the time of or before delivery of the goods other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged.

Explanation I: For the purpose of this clause 'sale price' includes,-

(i) the amount of duties or fees levied or leviable on the goods under the Central Excise Act, 1944 (Central Act 1 of 1944) or the Customs Act, 1962 (Central Act 52 of 1962) or the Assam Excise Act, 1910 (Assam Act 1 of 1910) or under any other enactment whether such duties or fees are paid or payable by or on behalf of the seller or the purchaser or any other person;
Comment:-

[The definition has been substituted by Assam Act No. XIII of 2005 brought in to force from 01.05.2005 vide Government Notification No. FTX.55/2005/2 dated 28th April, 2005. Prior to the substitution, the definition read as under:-
“the amount of duties or fees levied or leviable on the goods under the Central Excise and Salt Act, 1944 (Central Act 1 of 1944) or the Customs Act, 1962 (Central Act 52 of 1962) or the Assam Excise Act, 1910 (Assam Act 1 of 1910) or under any other enactment whether such duties or fees are paid or payable by or on behalf of the seller or the purchaser or any other person;”]

(ii) in relation to the transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract, such amount received or receivable as consideration;

(iii) in relation to the delivery of goods on hire purchase or any system of payment by instalments, the amount of valuable consideration payable to a person for such delivery;

(iv) in relation to transfer of the right to use any goods for any purpose (whether or not for a specified period) the valuable consideration received or receivable for such transfer; and

(v) Deleted
Comment:-
[Para (v) has been deleted by Assam Act No. XIII of 2005 brought in to force from 01.05.2005 vide Government Notification No. FTX.55/2005/2 dated 28th April, 2005. Prior to its deletion, it read as under:-
“the amount received by the seller by way of deposit whether refundable or not, which has been received whether by way of a separate agreement or not, in connection with or incidental or ancillary to, the said sale of goods.”]

Explanation II: For the purpose of this clause, 'sale price' does not include,-
(i) tax charged or chargeable under this Act;
(ii) any amount allowed by seller of goods to the purchaser as cash discount or commission or trade discount at the time of sale of goods according to the practice normally prevailing in the trade;

Message likes : 1 times