In direct tax

This query is : Resolved

Gv subba reddy (Querist)
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30 December 2013 Dear sir
buyer's liability of vat in case of purchasing of a finished good in a manufacturer (buyer pay's the excise duty)
finished good 100
add: excise duty 12.36
total 112.36
add: vat@ 14.5% 16.29
total 128.65 (total)
less:excise duty 12.36
liability 116.29
(OR)
finished good 100
add: vat 14.5
liability 114.5
what is the amount of buyer's liability 116.29 (OR) 114.5.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 January 2014 VAT is levied on sale price + excise duty.

So the buyer has to pay VAT on sale price + excise duty.

In this case the buyer has to pay an amount of Rs. 128.65 to the seller.

He can claim CENVAT credit of Rs. 12.36 (excise duty), if eligible.

He can also claim Input VAT credit of Rs. 16.29 (VAT), if eligible.

Gv subba reddy

Gv subba reddy (Querist)
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02 January 2014 sir,
the buyer does not give the excise duty to seller. he say's.(buyer) pay the excise duty to department. and should not impose vat on excise duty.
thank you

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 January 2014 I do not understand your statement "buyer does not give excise duty. He pays the excise duty".

Kindly elaborate.

Gv subba reddy

Gv subba reddy (Querist)
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02 January 2014 sir,
the buyer does not give the excise duty to seller. he say's(buyer) pay the excise duty directly to department. and should not impose vat on excise duty.
thank you

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