Vat on deposit
This query is : Open
16 November 2015
As per sales definition of MVAT Act, sales price includes deposit received from customers if not refunded within six months.
Nature of business for a company is that it trades in LPG sectors. It imports LPG and fills them in cylinders after LPG is brought at filling plants through its terminals.
When customer comes for LPG then a deposit equal to cost of cylinder is asked for per cylinder which is accounted for as deposit received from customer by assigning special GL indicator in SAP.
When cylinder is returned to company by customer after its closure of business with company then security deposit received is refunded. It may take 1 month, 2 months or even years i.e. its uncertain that when deposit will be refunded.
Now, as per definition of sales price department of sale tax of maharastra has asked for VAT to be paid on cylinder deposit received from customers.
1. As deposit is not revenue for company, is it compulsory for company to pay VAT on deposit as per definition of sales price?
2. Is there any decided case law in this respect either against assessee or revenue?
Nature of business for a company is that it trades in LPG sectors. It imports LPG and fills them in cylinders after LPG is brought at filling plants through its terminals.
When customer comes for LPG then a deposit equal to cost of cylinder is asked for per cylinder which is accounted for as deposit received from customer by assigning special GL indicator in SAP.
When cylinder is returned to company by customer after its closure of business with company then security deposit received is refunded. It may take 1 month, 2 months or even years i.e. its uncertain that when deposit will be refunded.
Now, as per definition of sales price department of sale tax of maharastra has asked for VAT to be paid on cylinder deposit received from customers.
1. As deposit is not revenue for company, is it compulsory for company to pay VAT on deposit as per definition of sales price?
2. Is there any decided case law in this respect either against assessee or revenue?
24 November 2015
No Reaponse till date.. Is any1 handling Maharashtra VAT matters?:
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