Vat treatment in case of subsidy
This query is : Resolved
28 March 2014
I have a query how to calculate VAT in case of Subsidy.
For example, Mr.A is purchasing goods worth rs.1,00,000 by paying CST. He has received subsidy from state government for the said transaction for rs.30,000. He sells goods to intra state registered dealer. Whether he should charge VAT on Rs.1,00,000 and then give credit note for the subsidized amount i.e. Rs.30,000. Or he can Net off the amount and can charge VAT on Rs.70,000(1,00,000-30,000)?
Please, Assist for the same.
Regards,
Vijeta
For example, Mr.A is purchasing goods worth rs.1,00,000 by paying CST. He has received subsidy from state government for the said transaction for rs.30,000. He sells goods to intra state registered dealer. Whether he should charge VAT on Rs.1,00,000 and then give credit note for the subsidized amount i.e. Rs.30,000. Or he can Net off the amount and can charge VAT on Rs.70,000(1,00,000-30,000)?
Please, Assist for the same.
Regards,
Vijeta
01 April 2014
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