I want to know the method of calculation whether right or wrong?
We have works contract registration for VAT for which, we have calculated vat as inclusive method as follows
1) Taken all input set-off 2) Calculated percentage of vat as the proportionate of sales, means if we have received input vat of 4% of Rs.100/-, then the percentage of the same with sales, on which we have calculated @4% vat.
following is the eg.
if our sales of Rs.100/-, we have deducted 30% for labour portion, our taxable sales is Rs.70/-.
our purchases of 12% items of Rs.30/- and 4% items of Rs.40/-