Mvat act

This query is : Resolved

kumudprakash k doshi (Querist)
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23 November 2012 one of my Dealer is purchasing the ready made garments from branded limited company in mumbai on mvat 5 % (MRP Rs. 100-marked down discount Rs. 17=83 inclusive of mvat Rs3.95so net price Rs. 79.05+ vat Rs. 3.95 total Rs. 83)and he is selling the godds on retail counters to Non tin holders consumers by way discount of Rs. 24/per piece in the cash memo itself and charging the vat on Rs. 55 + vat @5% Rs.2.75 total Vale Rs. 57.75 per piece hence there is net loss of Rs. 24.05 per piece and to that extent there is no value addition for vat liabilty. This loss of Rs. 24.05 has been compensated to him by original seller by issueing the Credit Notes of Rate Difference but without bifurcating the Net and Vat hence my dealer has not reduced set off input paid on the original purchase price of Rs. 79.05.and due to these RATE Differnce though the purchase value is reduced in the books but without reducing the input credit. Hence due to loss per(without reducing the input credit ) piece resulted in refund of excess input credit. Is the dealer is right in claiming the refund

Amol S Joglekar

Amol S Joglekar (Expert)
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23 November 2012 Not able to understand... please elaborate. Giving a credit note of 13 makes it 60+13 = 73. Still much below the purchase price of 79.05

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