31 May 2012
Whether mistake in presentation in vat return can be a basis for imposition of tax.
suppose we have purchased following goods:- 1) Rs.1000/- goods which is taxable at first point by paying VAt on it. 2) Rs. 2000/- goods taxable at last point.
both are interchangeable and can not be separable from each other.
We have sold both goods at cost price + VAT ( since it is a controlled good and we can not charge tax)
Now our presentation was as follows in return:-
Total sales - Rs. 3000/- VAT @ 10% - Rs. 300/- ( though we are not required to pay VAT on First point Taxable goods)
Less:Input VAT - Rs. 100/- ( though we are not eligible for input vat claim on first point taxable goods.
Net tax paid - Rs. 200/-
Now, the tax authorities are claiming Rs. 300/- as output Vat, but they are not accepting input VAT of Rs. 100/-. hence we may require to pay Rs. 100/- twice.
Is it Justified. Whether mistake in presentation in return can be a basis for imposing tax twice in a single sale.
CAclubindia
