pricing of goods

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Rakesh T.R. (Querist)

18 October 2007 Is there is any mandatory condition for the traders to keep their GP ratio as prescribed by Sales Tax authorities(if Any)under KVAT ?
Can a Trader Sell his product below the purchase price? or is it necessary for him to keep a particular Value addition at the stage where he operates ?

Rakesh T.R.

Rakesh T.R. (Querist)

18 October 2007

CMA Gul S

CMA Gul S (Expert)

19 October 2007 Hi Rakesh,

Its is always better to have a GP ratio for the Business, may be this is not mandatory with the ST Authorities.

No Business is carried with a loss (less than Purchase Price). The Trader has to justify the sales, he has to have value addition on the price

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

24 November 2007 Can a Trader Sell his product below the purchase price? or is it necessary for him to keep a particular Value addition at the stage where he operates ?

I don't think that there should be any condition that a trader can not sell his product below the purchase price. However, dealers should be in position explain suitably the reason thereof.

In context of Assam, I will like to cite one example:-

Say Company 'Y' wants to give one "Calculator" free of cost to byuers, who are buying a particulr product in excess of prescribed quantitiy. Here the company will loose the ITC (VAT PAID) on such calculators. However if the Company charges Rs. 1/- instead of free distribution, no ITC will be lost.

As regards thy question relating to GP ration is concerned, I could not understand your exactquestion. It will be interesting to know if any state Government is prescribing any minimum percentage of G.P. for dealers.

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