reg vat computation.

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S.RAVICHANDRAN (Querist)

27 September 2008
Respected Sirs,

please confirm me as per VAT act whether vat should be calculated after considering freight charges or transport charges with basic value.

we came across many situations in my company in which vendors use different methods in their invoice in computing VAT.

which is the correct way invoicing bill for computation vat

warm rgds,
ravi

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

28 September 2008 Normally cost of outward freight does not form part of sale price and accordingly is out of the ambit of VAT.

You may kindly refer definition of 'sale price' given in your State Act.

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Vasanth Kumar J K

Vasanth Kumar J K (Expert)

29 September 2008 Relevat local vat laws to be referred as after introduction of vat the rules providing deduction for freight charges have been removed. Moreover it is very clear in cst act that if freight charges charged and collected separately in invoice does not form part of sale price.

one has to see whether such expenditure is pre-sale or post-sale expenditure.

recently in one of high court decision it has been held that, merely freight charges charged and collected spearately in invoice does not disqualify for the purpose of sale price. Therefore it has be decided whether it is pre-sale or post-sale exepnditure.

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