Vat on used goods, exchanges and part-exchanges

Hi everyone, 

I am starting up a new store through which I'll buy and sell used electronic goods such as mobiles, laptops, ipads, etc. A customer can bring his/her old mobile phone to me and I'll offer him/her store credit or cash in lieu of the mobile phone. The customer can then use the store credit or cash to buy a different item from my shop. My question is how will the VAT be calculated in this case? Do I have to pay VAT on the entire sale value of the item or can I claim a rebate on the amount I paid to the customer as cash or store credit?

Info - The store would be located in gurgaon and products will be sold all India.

Any kind of help is highly appreciated.

Thanks,

Rahul

suppose the sale value of the item purchased by the customer is 5000 and 1000 is the amount of store credit then vat will be applicable on 5000 as vat is payable on the sale consideration . in your case sale consideration is 5000 in the form of 4000 cash and 1000 store credit

      I agree with Harshal

Is there a case law in support of this view ?