Vat on free stock
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 March 2013
SIR
STOCK PURCHASED AND SOME STOCK WAS SOLD ALONG WITH FREE ITEMS (10+2 ) WHAT IS THE VAT ACCOUNTING ON FREE STOCK GIVEN THROUGH SALES
PURCHASE INPUT VAT CREDIT AND SALE FOR 10 ITEMS OUTPUT VAT CAME BUT WHAT ABOUT 2 ITEMS VAT
STOCK PURCHASED AND SOME STOCK WAS SOLD ALONG WITH FREE ITEMS (10+2 ) WHAT IS THE VAT ACCOUNTING ON FREE STOCK GIVEN THROUGH SALES
PURCHASE INPUT VAT CREDIT AND SALE FOR 10 ITEMS OUTPUT VAT CAME BUT WHAT ABOUT 2 ITEMS VAT
08 March 2013
In my opinion, If you are mentioning the free stocks in the Invoice along with the billed items, then you dont have to do anything else.
Suppose if 10 items rate are Rs. 100 but you are giving them 12 items for the same value (i.e. Rs. 100/-) then your tax liability will be the same.
But if you are just issuing a invoice of free samples, or distributed some of your stocks for free then you will have to reverse the Input VAT on those.
Suppose if 10 items rate are Rs. 100 but you are giving them 12 items for the same value (i.e. Rs. 100/-) then your tax liability will be the same.
But if you are just issuing a invoice of free samples, or distributed some of your stocks for free then you will have to reverse the Input VAT on those.
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