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Charging of vat for amortisation value

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This query is : Resolved

G. Sreenivasan (Querist)

02 August 2012 Dear Experts,
Please give your expert opinion on below issue.

For a customer supplied Mould/Tool, please confirm charging of TNVAT is correct or not as we do it for charging EXcise duty. If the below calcuation is not correct please clarify and how it should be?

Particulars
Basic value for 100 Nos x Rate/No
Add: Tool Amortisation cost/No x 100 Nos
(only for taxation purpose)
ED Assessable Value
Add:Excise Duty @12%
Add: Ed. Cess 2% ED
Add: SH Cess 1%ED
VAT Assessable Value
Add: TNVAT @5% on above
Total bill value
Less : Amortisation cost
Balance Charged to Customer
G. Sreenivasan

RENGARAJ R.K

RENGARAJ R.K (Expert)

02 August 2012 Dear Mr G.S,

In my opinion, VAT has to be calculated after deducting the Amortisation cost.

i.e ED assessable valu +ED+ CESS= Less amortisation cost and then add applicable vat.

G. Sreenivasan

G. Sreenivasan (Querist)

04 August 2012 Dear Mr. RRK,
Thanks for your reply. Could anyone please clarify the reason for this?
GSV
CMD

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