Mvat registration

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This query is : Resolved

paresh zatakia (Querist)

19 October 2011
Dear Colleagues,
Mr. A has commenced new business. He purchased goods worth Rs. 6 lacs & sold these goods on the same day for Rs. 7 lacs, therefore he would be liable for registration under MVAT Act.
1. In this case on what amount he would be liable to pay MVAT?
2. Can he pay tax only on the difference amount of Rs. 2 lacs-(i.e.Rs.7 Lacs –Rs. 5 Lacs) or he would be liable to pay MVAT on entire amount of Rs. 7 lacs?
3. Can he collect the MVAT from buyer?
4.can he claim set off on Purchase of Rs. 6 lacs
REGARDS
C.A.PARESH ZATAKIA
9833855518

CA Mayur zanwar

CA Mayur zanwar (Expert)

21 October 2011 Mr. Paresh bhai...

in mvat registration liability is on crossing Rs. 5.00 lacs..

Their are two views :
1.
If their are numerous bills from the sale bill crossing Rs.5.00 lacs ( eg 1st five bills total Rs.4.80 lacs ) the sixth bill is Rs. 0.30 lacs and seventh bill is Rs. 1.90 lacs.. then you have to pay vat on 0.30 + 1.90 lacs .. sale of Rs. 4.80 will not be taxable u/s 3(2)..

2. turnover above rs. 5.00 is only taxable...

for the purchase corresponding to Rs. 4.80 lacs shown under 3(2) you can not claim set off. on the balance purchase you can claim input tax credit...

He can collect vat on .30 + 1.90 lacs..( assuming he makes timely registration in one month ) of crossing the turnover.

CA Mayur Zanwar
9422855595
cazanwar@gmail.com

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