10 July 2012
Question - M/s. Abanti Associates is a registered dealer engaged in the manufacturing of steel in the State of Maharashtra. During the year 2008-09 the firm has procured raw materials of Rs. 25,50,320 (VAT @ 4%) and purchased plant and machinery of Rs. 20,00,000 (VAT @ 4%) and Rs. 5,00,000 (CST @ 2%) for use in the manufacturing of steel. Sales of steel materials made during the year is Rs. 40,00,000 (VAT @ 4%) and inter-State sale is Rs. 5,29,000 (@ 2% CST). Besides above, branch transfer of Rs. 3,20,000 was made to Kolkata. Calculate the following as per White Paper on VAT Law in India - (i) Output tax (ii) Input tax credit to be availed during the year (iii) Balance tax payable and (iv) Input tax credit, if any, to be carried forward (ICWA Final New Syllabus June 2009)
Answer -
(A) Output tax – (a) sale within State – Rs 1,60,000 (4% of Rs 40,00,000) (b) Interstate sale – Rs 10,580 (2% of Rs 5,29,000) (c) Stock transfer of Rs 3,20,000 – No tax. Total sales (including stock transfer) – Rs 48,49,000. Total Tax payable – Rs 1,70,580
(B) Input tax credit on raw material 1,02,012.80 (4% of Rs 25,50,320 – It is presumed that the purchase price given in example is net of Vat). Total sales (including stock transfer) are Rs 48,49,000, out of which stock transfer is of Rs 3,20,000 i.e. 6.6%. Hence, on 6.6% of input raw material, 2% Input Tax Credit is disallowed. Total raw material – Rs 25,50,320. Raw material used for stock transfer (6.6%) i.e. Rs 1,68,321.12. Hence, 2% of Rs 1,68,321,12 i.e. Rs 3,366.42 is not allowed. Thus, Input Tax Credit available is Rs 98,646.38 (Rs 1,02,012.80 – Rs 3,366.42)
The author says he has claimed only 1% ITC for the purchase value of Rs.10 lacs. How he will reverse 2% (deduction as mentioned in the reply) for the stock transfer value of 5 lacs to other state against F form?
14 August 2012
value of r/m------500000 vat on Purchase-500000@1%=5000 suppose you are sale others purchase in rs 600000 than total sale including stock tranfer--1100000rs ratio of stock tranfer=500000/1100000=45.45% vat credit on stock tranfer=5000*45.45%= RS 2272.70
If i am not mistaken the value indicated in second line is Rs.5000/- and not 50,000/= and hence the answer is Rs.2272.70. All other formula is correct.
CAclubindia
