XYZ Limited sales Product X to M/s ABC & sons for Rs 100+12.5% Tax. Thus total Bill value come to 112.5. Now M/s ABC sells the same product at Rs 90+12.5% Tax thus Bill value comes to 101.25. No case is there is no Value addition rather value had reduced.Thus M/s ABC & Sons will claim refund from Department.....Will such situation creat any problems within the Maharashtra Value Added Tax Act.....I am facing this practical problem when scheme is given by company to distributors & thereby distributor is selling less than Billing value by by company to distributors.
1 Replies
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 05 August 2012
Mr Manish,
Yes it can happen. One dealer may have to sell his products at price lower than purchase price.Some times the tax rate may be reduced or nil like in interstate sales or export or sales to SEZ companies,embassies etc. In such situations excess tax paid during purchases can be claimed back as excess of ITC.....MJK
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