I am vat dealer and recently i have come across an item whose supplier is an unregistered dealer ? Firstly, can i make a purchase from such person?? Secondly, how shall i show in vat returns?? do i need to pay additional VAT ??
10 April 2013
Yes, you have to consider this purchases in VAT Return as 0% purchases and as well as you have to pay vat at the time of sale of such purchases according to the VAT rate applicable to such items.
10 April 2013
Then, How shall be the proof of purchase shown as ?? Because the unregistered person would not have any invoices and is labour. Will payment voucher would work as a proof ?
10 April 2013
Yes, you can take it as the proof of purchase but on such voucher indicate payment related to the purchases. However Sales tax department may not ask any proof for the purpose of non-credit claimed purchases because of on such purchases you can't claim any Input credit of VAT so there is no any loss to the department as well as on such purchases also you are paying VAT tax at the time of sales so no revenue loss to the department. So it may not ask any proofs regarding the non-creditable purchases. However it asked then you can use payment voucher. But it may be makes problem to the seller(i.e who sold the goods to you) if you have any more quantity amount of purchases i.e you have the purchases from such unregistered dealer in lakhs then the department view may go to such dealer. However such risk will be on the dealer but not on you because of due to purchases with unregistered dealer you not claim any credit as well as at the time of sale you paid VAT so no problem to you.
Since there is no loss to revenue, they wont ask for more information / evidence.
In this case, make sure that dealer you have kind of purchase order or service order in response to the voucher issued by that unregistered dealer as well lorry receipt etc.....
I hope it works correctly according to the Andhra Pradesh VAT.
@ Mihir - Since i m taking the material from a labour kind of person, he would not have any invoices and the material is available locally so there is no lorry receipts, how shall i treat it then ?
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