can i avoid vat

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

22 November 2010 my friend is having a business of selling mobiles, he has registered him self under VAT.
Now he has started 'telebrands' distribution-ship for which they provide him commission say Rs 200 on a product.
They issues him a invoice with CST @12% without 'C' form.
Now i want 2 know that can my friend register himself under CST and get the @ reduced plus can he avoid paying VAT on the ground that he is receiving commission

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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22 November 2010 Selling mobiles phones etc., is a business that is registeredwith VAT office. Whether he is registered for CST?
If registered, only mobiles are mentioned...... right.
If telebrands products are MOBILE PHONES ONLY, then you can issue C form. Else you have to get registered with CST &in the registered certificate the goods are specified, C Form may be issued only to those goods purchased from outside the state.

Your friend cannot avoid VAT on sales he made to his customer.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 November 2010 sir thank your for your advice, but sir can he just show it as commission witout from the company because the sales order r taken by the company only he only delivers it to the customer.... but he receives invoice in his name... please guide

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CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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23 November 2010 @Ramratan

First tell me whether he gives TDS certificate for the commission portion?

If not why dont you show it as purchase (when you purchase) & sales (when you made the sale to your customer) by doing so your cost i,e. in CST tax amount would reduce to the extent of difference in rates of tax.

Querist : Anonymous

Querist : Anonymous (Querist)

23 November 2010 sir u r right, but he receives a very low rate of commission and it is fixed because of MRP now if he pays VAT for local sale and CST for inter state sale he gets very low margin... please advice thank you
(he does not receive TDS)