Hi
I am a distributor for Tractor Company in Nagpur. Manufacturing unit for tractor is in Maharashtra. The company has excemptions on sale of their product in the State of Manufacturing(Maharashtra). The bill we get from the company is without any Tax. Vat for tractors is 4%, while billing the tractor to customer how my Tax will get calculated, as what i need to pay to Gov is diferrence of Input and Output VAT and if i calculate 4% VAT on Sale Rate the amount of VAT getting calculated in very High.
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Nornal Vat Calulation
Manufacturer Sale Rate Rs. 100000/-
4% VAT Charged - 4000/-(Output)
Final Amount - 104000/-
My Sale Rate is Rs. 200000/-
4% VAT amount on Sale Rate is Rs 8000/-(Input)
Invoice amount is Rs. 208000/-
VAT payable to govermnent is Input - Output
8000 - 4000 = 4000.
VAT is applicable for Tractors in maharashtra. But the manufacturing comapany have got exemption from Gov b'coz of which the tax on sale to dealers in maharashtra is excempted as manufacturing unit is there in maharashtra.
My doubt is when i sell the tractor to customer how will be my tax calculation.
In the below there is excempted on sale to manufacturer so there in no Output Vat.
eg.
My NDP is Rs. 100000/-
My Sale Rate is Rs. 200000/-
4% VAT amount on Sale Rate is Rs 8000/-
Invoice amount is Rs. 208000/-
As per VAT logic tax amount to be paid to Gov should be Rs.4000/- and not 8000/-.
CAclubindia
