As per circular No.VAT-2005/Act/VD-1 Mumbai Dt : 1.4.2005
Trade Cir.-1T of 2005, only manufacturers and importers of medicine need to pay mvat on medicines listed under entry no.29 of schedule C.
The wholesalers, distributors, stockists, semi-wholesalers and retailers etc. should not show the turnover of sales and of purchases relating to medicines in their periodic returns. Sales of medicines in the hands of such dealers would not attract the levy of tax.It is possible that some of such dealers would be dealers in items other than medicines. If such be the case, then, ofcourse, they will have to show the turnover of sales and of purchases relating to items other than medicines in their periodic returns. On such sales of items other than medicines, they would be liable to pay tax at the appropriate rates. On the corresponding purchases they would be eligible to claim set-off in the normal manner.
Querry- now does this circular stand till date with the exact meaning as above or there has been any amendment. if yes pls quote the circular no. and date.
in order to find the sales tax included in mrp for sale of goods other than medicines, wherein an ayurvedic medicine shop sells general items such as packaged snack food items, cosmetics, ice-cream, colddrinks, etc., whether the vat working needs to be done as under:-
mrp rs.100/- vat class 5% hence, if mrp is inclusive of taxes,vat included in mrp would be
mrp*vat rate/105 i.e. 100*5/105=4.76/-. now suppose the same item was purch at rs.90/- & rs.3/- vat was paid on the same, whether the net sales tax payable is rs.1.76/-
pls advise in case of a retailer/reseller of ayurvedic medicines & general strs items who is
not presently under the composite scheme
1) whether no mvat is payable on sale of ayurvedic medicines purchased from registered dealers, wherein the mvat has been paid at the time of purchases & hence no set off to be claimed. also turnover of sales & purchases of ayurvedic medicines to be excluded in mvat returns.
2) whether the above calculation on sale of general items is correct and mvat payale accordingly.
pls advise.
regards,
parag
CAclubindia
