CMA.Baskar.V (Cost Accountant) (400 Points)
16 June 2011Hi,
Can anyone clarify following matter.
A company purchase Rs.1,50,000/- worth of material with VAT 5% in karnataka and the same material bill to customer for Rs.1/- as free of cost material to the customer.
Here, input credit on purchase, there are adjusting with other sales out put tax.
whether it is correct and if not, what is the procedure for free of cost sales.
subramanya
(Professional)
(907 Points)
Replied 16 June 2011
Hi,
As you are billing at free of cost or at a lower rate, you have to reverse the Input VAT paid amount.. In Karnataka Form VAT 100, you can refer Box no. 10 for more details.
With regards,
Subramanya
CAclubindia
