We are a Bangalore based company. Company Y (located in Hyderabad) placed an order with us for laptop bags with company logo. We procured bags from a company X (located in Bangalore) along with company logo and delivered it to Company Y at Hyderabad .
Amount paid to Company X = 1121 (including VAT)
Selling price mendioned in invoice for company Y (selling price) = 1233
Company Y, paid us 1233 – 6% = 1159/-
We are not understanding why company Y should deduct tax of 6% under VAT and WCT. Can you please clarify?
If above is true then we are paying VAT while purchasing the product and also to buyer..why is this?
Please let us know so that we can get back to buyer accordingly.
Regards,
Jagadish
CAclubindia
