Billing in case of goods distributed free

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2011 Dear All,
I seek your advice in this matter that when a dealer is giving a scheme that after 5 quantity of goods purchased, the customer will get 1 quantity free. In this case the billing is done separately for both quantities. The problem is in octroi billing where one has to show atleast 75% of MRP, no vat is collected on same. Since it is for free, however a separate bill of 75% is made. Can you suggest us a better way of billing and charging vat on the same?

VISHRUT

VISHRUT (Expert)

21 September 2011 I still have doubt about applicability of octroi on such free good so kindly confirm the same.

Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2011 It is confirmed that octroi is leviable since both the goods are send together.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

24 September 2011 Mr Author,
Octroi is charged on entry of goods to an area for use or consumption.So,it differs from VAT,which is chargeable on sale only and not on free replacement or goods distributed free of cost as per a scheme.Such goods can be seperately accounted along their documents.
MJK

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