Is VAT applicable on Octroi charges paid

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RAMNATH.R (Querist)
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10 December 2007 When we pay our vendors for transportation of goods, vendor charges his service charge + octroi. VAT is applicable for the sevices provided, but is it applicable on Octroi Charges too...Please help....

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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10 December 2007 Your question is not clear. No VAT is applicableon service provided (normally).

If your vendor is charging cost of delivery (transportation)charges separately, I think (subject to the definition of sales price given in your State VAT Act)as per Assam VAT Act and as per CST Act, no VAT is leviable on such delivery cost. However, if it is a part of yur sales price, the whole amount will be taxed.