VAT on self consumption
This query is : Resolved
26 August 2009
pls note that we have a contract of construction a wall, rate inclusive of cement, now we are providing cement to the contractor and will recover the same from his bill.
we are manufacturer of cement.
my question is :
1.is this constite sale or self
consumption.
2.how we raise the bill/debit note to party
3. is vat would be applicabe on such bill or not
we are manufacturer of cement.
my question is :
1.is this constite sale or self
consumption.
2.how we raise the bill/debit note to party
3. is vat would be applicabe on such bill or not
27 August 2009
you are saying yourself that you will recover the amount of cement from the contractor, then where is the confusion?
27 August 2009
pls go through with my abone 3 points
02 August 2025
Let's break down your query step-by-step:
---
### Situation:
* You are a **manufacturer of cement**.
* You have a contract for **construction of a wall** (probably with a contractor).
* You are **providing cement to the contractor** and recovering the cost from his bill.
---
### Questions and Answers:
**1. Is this a sale or self-consumption?**
* Since you are **providing cement to the contractor and recovering the cost from him**, this **amounts to a sale of cement to the contractor**.
* It is **not self-consumption**, because you are transferring ownership of cement to another party and charging for it.
* **Self-consumption** means you are using your own goods internally without transferring ownership or charging outside parties.
---
**2. How to raise the bill/debit note to the party?**
* You should raise a **tax invoice** to the contractor for the quantity of cement supplied.
* The invoice should clearly mention:
* Quantity of cement supplied
* Price per unit
* Total amount
* Applicable VAT rate and VAT amount
* GSTIN/VAT registration number (if applicable)
* This will serve as your sale invoice.
---
**3. Is VAT applicable on such bill or not?**
* **Yes, VAT is applicable** because this is a **sale of cement**.
* You are supplying cement to another party, so VAT on cement (as applicable in your state) must be charged.
* The applicable VAT rate on cement varies by state but typically ranges from 5% to 12.5% (you should confirm your local VAT rate on cement).
---
### Summary:
| Question | Answer |
| ------------------------------- | ---------------------------------------- |
| Is it sale or self-consumption? | It is a sale (not self-consumption). |
| How to bill? | Raise a proper VAT invoice with details. |
| Is VAT applicable? | Yes, charge VAT as per applicable rate. |
---
If you provide the **state** you are operating in, I can help confirm the exact VAT rate applicable on cement for your location.
Would you like that?
---
### Situation:
* You are a **manufacturer of cement**.
* You have a contract for **construction of a wall** (probably with a contractor).
* You are **providing cement to the contractor** and recovering the cost from his bill.
---
### Questions and Answers:
**1. Is this a sale or self-consumption?**
* Since you are **providing cement to the contractor and recovering the cost from him**, this **amounts to a sale of cement to the contractor**.
* It is **not self-consumption**, because you are transferring ownership of cement to another party and charging for it.
* **Self-consumption** means you are using your own goods internally without transferring ownership or charging outside parties.
---
**2. How to raise the bill/debit note to the party?**
* You should raise a **tax invoice** to the contractor for the quantity of cement supplied.
* The invoice should clearly mention:
* Quantity of cement supplied
* Price per unit
* Total amount
* Applicable VAT rate and VAT amount
* GSTIN/VAT registration number (if applicable)
* This will serve as your sale invoice.
---
**3. Is VAT applicable on such bill or not?**
* **Yes, VAT is applicable** because this is a **sale of cement**.
* You are supplying cement to another party, so VAT on cement (as applicable in your state) must be charged.
* The applicable VAT rate on cement varies by state but typically ranges from 5% to 12.5% (you should confirm your local VAT rate on cement).
---
### Summary:
| Question | Answer |
| ------------------------------- | ---------------------------------------- |
| Is it sale or self-consumption? | It is a sale (not self-consumption). |
| How to bill? | Raise a proper VAT invoice with details. |
| Is VAT applicable? | Yes, charge VAT as per applicable rate. |
---
If you provide the **state** you are operating in, I can help confirm the exact VAT rate applicable on cement for your location.
Would you like that?
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