20 September 2011
Sir, One of client is saleing cement which attractes VAT @ 14% in rajasthan. Suppose Company's Billing (i.e. Purchase amount ) is 240,than Client have the input credit of = 240*14/114 = 29.47 RS, Where Client is the wholeseeler who sale the same @ 230 Rs PB,output credit = 230*14/114 = 28.24. After this company gives the credit of 12 RS to Our client without recovry of VAT. Now Our client have an excess of Input Credit on RS 10 . Now my ques. is whether he will be able get the refund of that or may be adjusted in next Vat return.
23 September 2011
Mr Gaurav, Where the cement manufacturer is located,within Rajastan or outside?.If bought from outside the state then input credit of purchases is not avilable.If cement is purchased within Rajastaan,then there will be an excess of input tax which has to be refunded by the government. MJK
24 September 2011
Thanks sir for reply, Yes cement factory is located in rajasthan ,but adviser of client said that since we have excess input tax which is in actual paid by company on behalf of agent (Our Client in this case).how can we show the output tax low as compare to input tax (Sale is less than purchase price).
Ex:- Suppose company's billing price is 240 RS (Retailer Price)i.e. company's paying VAT on retailer price where wholesale rate is 225 Rs Than we have an excess of Input tax which should be refunded by the client ,But Govenment doesn't refund the same saying how can u sale less than it's purchase price where in after company's give us the credit note as per scheme for covering that loss,
Sir ,please tell me what i can suggest to my client regarding this refund of excess Vat input credit
24 September 2011
Mr Gaurav, There is no much problem in this case.Your client being an authorised agent has to sell the products of the pricipal(cement manufacturer) at the price fixed by them.See,your client buys cement @240/pb,if he sells it @255/pb it may become less competitive resulting in low turnover.Some times manufacturers adopt tricks of this kind to promote their products.often they try other methods also.These schemes of manufacturers can not be treated as bogus.various other goods also have fluctuating market.Here the Govt can not reject the accounts or returns,just by saying that it is not possible.You are really paying higher amount of input tax as the purchase bills.Lower amount of output tax is due to the lower MRP fixed by the producer of cement in order to compete with other company brands.How you manage this loss is explained by way of credit note recived from the supplier.There is no legal baasis for not accepting your acounts or bills and refuse to refund the excess input tax by the tax department.In the extreme situation you may have to go for appeals before court or tribunal to get the case decided.Now try to explain your to higher authorities. MJK
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