Vat on free items
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 April 2010
Nirma Powder 1 Kg MRP 30 is offering a salt worth rs. 10 free on it for consumer and same is mentioned on bill. but billing from supplier is made like this
Nirma Powder 1 kg basic rate = 16
add vat @ 12.5% = 2
Salt 1 kg = 8
bringing the total cost of retailer at rs. 26 as usual where there is no such offer. so is it an evasion of VAT on the cost of salt i.e. rs. 8?
suppose we purchase in this manner and can we sale like same without any obligation to us from sales tax department?
Nirma Powder 1 kg basic rate = 16
add vat @ 12.5% = 2
Salt 1 kg = 8
bringing the total cost of retailer at rs. 26 as usual where there is no such offer. so is it an evasion of VAT on the cost of salt i.e. rs. 8?
suppose we purchase in this manner and can we sale like same without any obligation to us from sales tax department?
15 April 2010
Salt is listed in exempted goods under VAT Act/schedule. So the given billing pattern is O.K. The retailer can also follow the same modus operandi without harm.
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