Charging of vat on already tax paid price

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harsh (Querist)
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08 July 2012 Sir i bought some garments from a companys showroom in punjab. The company offered 20% discount on the mrp. The mrp included all taxes as mentioned on the price tag attached with the garments. However at the time of billing they charged 5.5% vat on the price of the garments arrived after the discount. On enquiring they told that mrp is inclusive of all taxes but in case of any discount vat is to be paid on the discounted amount. Please advise is it correct.

RITU JAIN

RITU JAIN (Expert)
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08 July 2012 ALL MOST COMPANY SALE GOODS ON MRP BASIS. TAX PAID TO GOVT MRP BASIS. DISCOUNT GIVES COMPANY TIMES TO TIMES INCREASE/DECREASE

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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09 July 2012 Mr Harsh,
The above billing is correct.He has sold you at a price less than MRP.So,the label marking does not apply for that sale.Further, a seller may split his price into the taxable amount and the charged tax within that MRP also for his ease in accounting etc.....MJK

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