G.Ramesh (Accounts Professional) (1089 Points)
31 August 2008Please clarify , We are the existing product line which is Tax free under VAT , Now we are going to promote new product which is taxable @ 4% by offering free along with the sale of existing product which is tax free. We are not going to collect any revenue on the new product promotion , whether we have to pay any vat on the new product promotion ?
sir, we are doing the Trading business of importing the "Bitumen" chemical from UAE. for that in addition to import duty we were paid "ADDITIONAL DUTY (4%) to compensate the local purchases. Whether it is possible to take credit against VAT at the time of sales made in local in india of this additional duty paid. Pls clarify.
Anuraag Sharma
(Sr Executive Finance)
(845 Points)
Replied 03 September 2008
Please clarify , We are the existing product line which is Tax free under VAT , Now we are going to promote new product which is taxable @ 4% by offering free along with the sale of existing product which is tax free. We are not going to collect any revenue on the new product promotion , whether we have to pay any vat on the new product promotion ?
Yes you have to pay VAT on the purchase of that particular item which is taxable not on that which is tax free........
suppose you were selling Product A which was Tax free nd not ws in lines of VAT
nw you are planning to gift a Product A alongwith B free of Cost
nw if you purchase product A or any material to manufacture A then VAT payable on that should be paid by you.......
G.Ramesh
(Accounts Professional)
(1089 Points)
Replied 05 September 2008
IF A Product is Tax free value of sales is Rs.1000/- ,Input tax on A is Rs.40/- B Product is taxable @ 4% the cost of purchase is Rs300/-,input tax is Rs.12/- A Product is selling and B Product is offering free along with sale of A ? On which amount vat can be paid ? whether input tax claim is allowed or not ?
CAclubindia
