MVAT Tax on Sales

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This query is : Resolved

ankita (Querist)

05 January 2010 Dear Deepak Agarwal Sir,

I thank you for your reply regarding input tax credit. You have rightly pointed out that input credit cannot be availed of in respect of any tax collected in excess by a supplier. But the supplier dealer cannot forfeit the amount he has collected in excess in the name of VAT .He has to pay the same to the government along with the tax at the rate applicable.

What i mean to say is the supplier who charges excess VAT on his sales by mistake has to pay the excess also to the government and he cannot forfeit the excess.

The reason for that is also very logical. Even in service tax ,the same logic applies.Tax collected in excess if not refunded to the customer cannot be retained by the tax collector and has to be paid along with the regular amountof tax. If forfeiture were allowed , then it would amount to making of profits in the name of tax collection.

Hence, firstly the excess should be refunded and if it isn't then it has to be paid into the govt. treasury but in any case he cannot keep the money for himself.

CA Deepak P. Agrawal

CA Deepak P. Agrawal (Expert)

06 January 2010 Mam,
You have misunderstood my reply.
Dealer who has collected excess has to pay the excess into government kitty.
Sec 29(10)(b)states that any sum collected by the person or dealer in contravention of section 60 shall be forfeited to the State Government.
I.E. dealer has to pay such excess.
Hpoe the issue is resolved.
Regards,

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