Purchase of goods with vat

This query is : Resolved

Prakash Dayani (Querist)
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20 September 2015 HI,
I am looking to start a new business of selling goods (especially apparels) on e-commerce portals like paytm, flipkart etc. I have applied for DVAT number also.

I now that i will have to sell with an inclusion of VAT.

However is it necessary that when I purchase these goods for selling i shuld purchase with pakka bill (with VAT) only.

I have been made aware by some one that i shuld purchase with pakka bill only.

However when i explored the wholesale markets almost 85% of the sellers are selling without VAT and not providing a TAX invoice. It is seemingly becoming difficult to identify dealers to purchase goods from. kind of getting disheartened.

Can someone help me get clarity on this. I just imagine that if 85% of the sellers do not provide invoice then how is the business happening in India.

Have i been given the correct information by the person whom i spoke to?.., Please help

Guest

Guest (Expert)

21 September 2015 The problem is if u buy goods without VAT in it, then your profit margin will only come down. However the bills are required. There is no prohibition from buying goods without VAT legally. If you buy goods with VAT you will get input credit. THATS ALL. To continue business, you may buy goods without VAT but ensure that you either pay via bank or you get invoice / bill (without VAT) from seller.

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Prakash Dayani

Prakash Dayani (Querist)
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21 September 2015 Thank you so much, Just 1 more thing... If we are talking about taking a bill/paying via bank. If we choose to take the bill and pay in cash, should be in the name of the dealers shop or a bill just stating "cash memo" will also do?

And in case of bank payment can the payment be made to an individuals bank account or has it to be made to a bank account in the name of a firm?

Guest

Guest (Expert)

22 September 2015 If payment is made via bank bill can be in any form. But if cash is paid the party's name should be there in bill.

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