50% profit margin on sale. is it bad?
This query is : Resolved
Ankit Sharma
(Querist)
25 December 2016
Hello experts, for an ecommerce handicrafts business if we have 50% or more profit margin will it be a problem for vat tax filling.
for e.g.:
when we purchase products worth 1lakh
we have to sell it for At least 2lakh (to cover our expenses of courier and packing).
because of this our turnover goes above 2lakh on purchase of 1lakh. so when we file our VAT my CA said we can't go above 50% profit margin.
But my question is actual product selling cost is not much but our other expenses to sell those products are high. so is there anything my CA is missing.
Is it really not possible to have more than 50% margins.
please suggest.
CA R SEETHARAMAN
(Expert)
26 December 2016
There is no limit for profit margin it can be 100% if buyers are there.
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