Vat on freight

Siddharth Tiwari (Director) (26 Points)

26 October 2013  

Dear sir,

We are having a manufacturing unit of chemical in state of maharashtra. While selling our goods to a particular company, we have mentioned the freight charges after VAT.

For e.g the entries in Sales invoice is as given below :-

Basic Price : Rs. 10000

Excise @ 12.36% : Rs. 1236

VAT @ 5 % (On Rs.11236) : Rs. 562

Subtotal : 10000+1236+562 = 11798 Rs.----------------(a)

Transport Charges : Rs. 500 ----------------------(b)

Total Bill Amount : (a) + (b) = 11798+500 = Rs. 12298

Now kindly note that , we have not calculated MVAT on transport charges. The transport is provided by the another transporting agency also we are not giving the delivery of the material with our own vehicle.

Also another thing to note is that , in the Purchase order issued to us by the buyer, the same format i.e to mention transport charges after MVAT has been written. So were doing the same. But now while assessement , the Sales Tax department has raised a penalty for us.

So please guide / advice us in this matter.

thanks in advance,

regards, Siddharth Tiwari, From state of Maharashtra.