Hello Freinds,
Can some one help me on this unique problem.....................
Mr A (Consignee) has placed an order to Mr B (Contractor) for supply of material. Mr B has placed order to Mr C (Sub-Contractor) for supply of some material required by Mr A. Again Mr. C has placed order to Mr D (Manufacturer)to supply same material to Mr A.
Now
Mr A is registered in MVAT
Mr B is registered in MVAT
Mr C is not registered in MVAT
Mr D is Registered in MVAT
Goods supplied by Mr D to Mr A is moving with in Maharashtara. LR is in the name of Mr A as consignee. But since there is no connection between manufacturer & consignee Mr D is raising his Invoice to Mr C charging CST because Mr C is not registered in MVAT.
Mr C is raising his Invoices to Mr B without any tax as rates are inclusive of all taxes as per Purchase Order of Mr B.
Now the question is whether Mr B has to charge VAT or CST in his Invoice to Mr A??
At present Mr B is raising his Invoice charging VAT based on LR. but he is not able take credit aginst this Out put VAT.
It is very confusing us. Can some one clarify how billing should be done????
Regards