Concept of undervalue bill

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2013 Hello,

Can any one explain me what is the concept of Under value bill ? Tommorow,I have to vouch purchases in audit. I do not have knowledge of VAT.

Please help me as soon as possible.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

04 July 2013 Under value bill means the billed the materials less then the normal price, which is not an arms length price

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2013 Thaks You very much Sir.

But Sir can you please explain me more.

what is arms length price?

What is the diff between arm length price and normal price?

how to calculate input vat and output vat?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

04 July 2013 Arms length price is the price which is goods are sold between unknown buyer and seller, there will not be any price negotiation is abnormally.

Incas of reducing the tax amount, if the goods are sold under the normal price or arms length price can be called as under valued invoice

that time the vat need to be compare with the normal market price of the goods

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2013 Sir following are my doubts.

For example:- Mr. X is a dealer of " ABC Company " Chocolates and he sells his products to Mr Y is Rs 130 kg but in invoice is received from Mr. X is only Rs 95 Per kg and Vat is also calculated on Rs 95 but in accounting normal price of that goods is rs 130.

1) how much amount of input tax is calculate?

2) what is the diff of rs 35 per kg ?

3) How to account the diff of Rs 35 per kg ?

4) whether it will accounted as discount or loss ?

Because Mr Y has to book purchases of Goods at rs 130 and he has to pay Mr X Rs 130 per kg

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now