Vat return

This query is : Resolved

Mohammed Aman (Querist)
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06 June 2013 Dear Sir/ Madam

How to file vat returns of pharmaceutical distributors.
Note: we calculate vat on MRP.

Kindly advice me at earliest.

Thanks and Regards

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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17 June 2013 It depends upon your state VAT act

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2025 Hey! For pharmaceutical distributors filing VAT returns (especially when VAT is calculated on MRP), here’s a quick guide:
VAT Return Filing for Pharmaceutical Distributors (MRP Basis)
VAT Calculation on MRP
Many states allow VAT on pharmaceuticals to be calculated on MRP (Maximum Retail Price) instead of actual purchase price, as per their VAT rules/notifications.
Make sure your state VAT law permits this method.
Collect Sales & Purchase Data
Maintain records of all purchases (invoices from suppliers).
Maintain records of sales, with VAT charged on MRP basis.
Compute VAT Payable
Calculate output VAT on your total sales value (on MRP).
Calculate input VAT credit on purchases as per invoices (if applicable).
VAT payable = Output VAT – Input VAT credit.
Filing the Return
Login to your state VAT portal (Maharashtra or respective state).
Fill in details of sales, purchases, input tax credit, and tax paid.
Attach required documents if applicable (some states require purchase invoices summary, C-forms, etc.).
Submit the return before the due date (usually monthly or quarterly).
Payment
Pay any VAT balance due online or offline along with return filing.
Important Tips:
Always keep proper documentation to avoid disputes during audit.
Follow your state’s VAT rules strictly, as some states may have special provisions for pharma products.
Verify if your state allows input credit on pharma purchases (some restrict input tax credit on certain pharma products).

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