about inclusive price

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tarun kumar jha (Querist)

17 June 2010 Dear sir,
Being a manufacturer, we received an order to supply material. But the price given in the said order is written as inclusive of all i.e. taxes,transportation etc.
My query is as under :

1. Can we entertain such an order in which after raising bills we are liable to pay the statutory taxes on the whole ammount not on the net price of the material ?

2. Is it possible that any company may issue such an order in which nothing mentioned about the statutory requirements we require legal advice on the matter?

Please advice in the matter.

Thanking you

Tarun kumar jha

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

17 June 2010 1.This is totally based on the negotitation between the customer and suppllier, supplier has to decide the order need to accept or not

2. Since the price is inclusive of all you can back calculate the tax and charge tax on net amount

some of Govt orders and contracts also this inclusive conditions we can see

tarun kumar jha

tarun kumar jha (Querist)

17 June 2010 Thanks for advice but one question is there :

as advised under 2., Since the price is inclusive of all you can back calculate the tax and charge tax on net amount.

But the payment will be made in total then our sales figure stands on the total amount paid by the company, so we have to pay taxes on the total amount and hence we are in loss.
So we need a legal part of the matter to go further. Please advice.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

17 June 2010 Yes. If the price inclusive of tax, the tax is your account only based on the price you are quoated, for going legal matter before that you need to analyis the Contract offered by the contractee and terms accpted by the contractor

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