Under ap vat act - amount recovered from transporter

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Jayaprakash (Querist)
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04 March 2012 Our company is in manufacturing FMCG business, we sell our product through depot sales and as well to direct sales to customers from factory.

We send our stocks thru excise paid challans to depot, in transit, sometimes, depot received short quantity against actual quantity sent.The cost of said short quantity recovered from our transport agent. By any chance will it be treated as sales under AP VAT act. and VAT payable on the ground that the said amount recovered by the company on the short quanity stocks and it amounting to deemed sales.

Sometimes, we raise insurance claim for the same, in such case , will it be VAT payable on the realisation against such stocks.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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27 March 2012 Mr Jayaprakash,
Recovery of loss during transit can not be treated as sales,because there is no buyer and an invoice can not be raised. Further, often you make insurance claims also against such short delivery.It will be a contradicting position to treat he shortage as sale and also make insurance claims. So, no VAT liability arises.

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