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This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 September 2013
Dear Sir,
Suppose sale is Rs. 100/- and VAT charged thereon is Rs. 5/- and grand total is Rs. 105/-.
If I calculates 8% profit on Rs. 105/-, then whether it would not amount to double taxation on the VAT amount of Rs. 5?
Suppose sale is Rs. 100/- and VAT charged thereon is Rs. 5/- and grand total is Rs. 105/-.
If I calculates 8% profit on Rs. 105/-, then whether it would not amount to double taxation on the VAT amount of Rs. 5?
CA Pallav Singhania
(Expert)
12 September 2013
1st reduce the VAT from 105 by back calculation..
105-5= 100
then
if profit is 8 percent on sale then 10.86 percent on cost..
10.86 percent of sale, i.e 10.86 is the profit..
89.14 is the cost
105-5= 100
then
if profit is 8 percent on sale then 10.86 percent on cost..
10.86 percent of sale, i.e 10.86 is the profit..
89.14 is the cost
CA Pallav Singhania
(Expert)
12 September 2013
However, you already mention that the sale price is 100.. then how could you charge profit on sale price??
Cost + Profit = Sale Price
Cost + Profit = Sale Price
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