Composition
This query is : Resolved
07 March 2008
What is composition?under this method how VAT is leived? at what Rate?
08 March 2008
“composition” denotes mixture of more than one issue. We can say “composition” is an agreement between the parties where one of them is agrees to pay the other less than what is normally required, in full satisfaction of the whole of the claim.
In the case of VAT for example It is an agreement between ‘Government’ and ‘Dealer’, where it is enough if the dealer pays lesser rate of tax compared to what is actually required by the statute upon certain terms and conditions.
This scheme of tax is introduced to relieve the dealers, especially the small, from the maintenance of detailed books of accounts where it is very complex.
In the case of VAT for example It is an agreement between ‘Government’ and ‘Dealer’, where it is enough if the dealer pays lesser rate of tax compared to what is actually required by the statute upon certain terms and conditions.
This scheme of tax is introduced to relieve the dealers, especially the small, from the maintenance of detailed books of accounts where it is very complex.
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