pricing of goods

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Rakesh T.R. (Querist)
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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)
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18 October 2007

CMA Gul S

CMA Gul S (Expert)
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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)
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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.