Additional VAT
This query is : Resolved
28 July 2010
What is concept of Additional VAT?
How it differs from normal VAT rate?
Is it necessary to show it separately in Invoice?
How it differs from normal VAT rate?
Is it necessary to show it separately in Invoice?
K Bala Kishan
(Expert)
29 July 2010
Additional VAT is the concept where some states such as Punjab/Uttarakhand/Gujarat, etc have implemented.
This is the rate different from normal rate of VAT. Normal rate of VAT will be 5% or 12.5% as per state Act and the additional VAT will be the tax on tax. Let us say if a product is charged 5% then Additional VAT is 10%. Then it should be calculated as 5% VAT + (5% VAT * 10% Addl VAT). So it should be VAT on VAT. This can be shown separately in the invoice or else you can calculate VAT and Addl VAT total and put it in the invoice. But it is better to show it separately where any dealer can take VAT input tax credit as refund only on normal rate.
Regards,
Balu
This is the rate different from normal rate of VAT. Normal rate of VAT will be 5% or 12.5% as per state Act and the additional VAT will be the tax on tax. Let us say if a product is charged 5% then Additional VAT is 10%. Then it should be calculated as 5% VAT + (5% VAT * 10% Addl VAT). So it should be VAT on VAT. This can be shown separately in the invoice or else you can calculate VAT and Addl VAT total and put it in the invoice. But it is better to show it separately where any dealer can take VAT input tax credit as refund only on normal rate.
Regards,
Balu
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