vat on sales should reverse in case of rate diffrence allow?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 March 2010 please suggest me can vat charged on sales of goods can reverse if rate diffrence given to party. as per company policy sale rate cannot changed in bill but as per clients volume or turnover rate diffrence allowed and at the time of sale company agree for rate diffrence given to client . suggest me on amount of rate diffrence output vat can reverse or not

CA Umesh Sharma

CA Umesh Sharma

(Expert)
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07 March 2010 Please note that Under MVAT act, there is no provision giving effect of rate differance on sale price. Its solely the decision of the company to give rate differance Net of Vat or Gross. Its optional on the Company. If reversal or cerdit is to be given of VAT on rate differance, than it should be as per section 63(6). Were vat should be separatly shown in credit note or debit notes as the case may be, then only effect can be taken in sale turnover and it will be reduced accordingly. For ur referance asection 63(6)is given below:

" If the sale price or, as the case may be, the purchase price of any goods
is varied and credit notes, or as the case may be debit notes, are requested to be
issued to give effect to such variation, then,--
(a) the credit notes or, as the case may be, debit notes shall separately
specify the component of tax, if any, and the component of price , and
(b) such credit notes or, as the case may be, debit notes, shall be
accounted for in the return in the period in which appropriate entries for debit notes
and credit notes are taken in the books of account."