Type of tax

This query is : Resolved

LALIT KUMAR (Querist)
Follow

07 January 2015 Sir,

If a small firm purchase an item from their stock point and serve home delivery to their costumer.
On that case, What types of Tax implemented on the same firm.
So, Please guide on above mention case

Regards

Lalit

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
Follow

07 January 2015 if they are selling any product then vat is applicable and icnome tax will be applicable later.

LALIT KUMAR

LALIT KUMAR (Querist)
Follow

10 January 2015 Thanks for guide on the same.
is Service Tax is also applicable on above mention case?

Regards

Lalit Kumar

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

02 August 2025 In the case of a small firm purchasing an item from their own stock point and delivering it to the customer’s home, here’s how the tax treatment generally works:

### 1. **VAT (Value Added Tax) / GST:**

* **Applicable** on the sale of goods.
* When the firm sells a product (even if delivered at home), VAT (pre-GST) or GST (post-GST regime) is charged on the sale value.
* The place of supply and type of goods will determine the applicable VAT/GST rates.

### 2. **Income Tax:**

* Applies on the **profits** earned by the firm from its business.
* The firm must report its income and pay tax accordingly.

### 3. **Service Tax (pre-GST context):**

* Service Tax was applicable on **services** and not on the sale of goods.
* Home delivery of goods was considered a service and was taxable under service tax if the delivery was charged separately from the sale price.
* If the home delivery was **included in the sale price** and not separately charged, service tax **may not be applicable**; only VAT would apply.

### 4. **Under GST regime:**

* GST subsumed VAT and Service Tax.
* If the firm is delivering goods to customers, GST on goods sale applies.
* If any services (like separate delivery charges) are provided, GST on services may also apply.

---

### Summary for your case (pre-GST):

* **VAT:** Applicable on sale of goods.
* **Service Tax:** Applicable **only if delivery charges are billed separately**.
* **Income Tax:** Applicable on profits.

---

If you want, I can help with GST-specific treatment or more detailed scenarios!

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now