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Cst and vat filing difference

Rahul (owner) (29 Points)

01 June 2015

im from telangana and from last month i started selling through flipkart and amazon through which i sell local customers and other states customers also and these customers do not provide any form or anything.

I purchase locally from telanagana only.

i have to now file both VAT and CST returns.

Ex: Please help in the below given scenario.

Purchase items with 5% tax category: Rs.100

Sales to local telangana customer : Rs. 40

Sales to other state customers : Rs. 60

***

Now in filing VAT what should i enter VAT sales as

Now in filing CST what should i enter CST sales as :

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5 Replies

Harshal (CA) (106 Points)
Replied 01 June 2015

Dear Rahul, As per your example your Vat Sales is Rs 40 & CST Sales is 60. Local Sales will be taxable at same rate at which you purchased them I.e. 5%. In case of Interstate Sales Concessional Rate at 2% is allowed if you procure C form from customer. In your case customers are not providing any forms so it will be chargeable to CST at local VAT rate. So on interstate sales you have to Pay CST at 5%. Regards: - CA Harshal Pahade Partner KPPM & Associates Chartered Accountants Pune Contact 9272344759

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Rahul (owner) (29 Points)
Replied 02 June 2015

one more question:

I sell to a flipkart customer and flipkart asks us to make the bill in customers name but with message "powered by Flipkart".

differnce in opinion by differnent people, some day as you are geeting money from flipkart, you can put vat value only on the amount you are receiving, some day only on the bill amount you already made.

Example:

Product sold to flipkart customer : Rs. 100

flipkart commission: (Rs. 15 commission + 50 shipping ) + 14% service tax

amount debited to my account by flipkart : 25.90 rupees

But the bill made to the customer is of Rs.100

while filing VAT what should i put this value of transaction ? 100 or 25.90

If 100 ? what is the options available where we can incorporate in the invoice through which we can file vat only at the amount flipkart provides to us.

Deepak sharma (Learner) (1431 Points)
Replied 21 June 2015

Good question! I'm also looking forward for its reply.

CA Ronak Doshi ( ) (234 Points)
Replied 22 June 2015

Dear Rahul,

Usually for VAT purposes, the place of taxation is determined by the "place of supply", thus you have to charge VAT and CST accordingly where you actually sell it (where the customer receives the goods).

Regarding your second query, VAT is chargeable on what the customer pays and not what the seller actually receives. Hence, accordingly you have to put the value of transaction as Rs. 100.

So your remedy is to charge and collect VAT on the Gross Selling Price at which you sell to customers and not on Net Amount after Flipkart's Commission, this will eliminate your uncollected VAT exposure.

Hope I have solved your query,

Regards,

Ronak