Cst - mobile phones - VAT

Akash Jain (CA Final Student) (261 Points)
Replied 11 May 2012

Dear Rajesh,

The response to your queries are as follows.

1)If you don't get any input credit you can opt for Composite Scheme as that would be benefical for you.

2)VAT is a State Tax and that varies from state to state and 5% is the lowest VAT rate on mobile phones in India.

3)Not possible to raise your bills from Karnataka as place of bussiness in Maharastra.

Regards.

Mihir Doshi (B.Com, CA, CS, LLB) (2187 Points)
Replied 11 May 2012

Agree with Mr. Akash, Also you need to pay CST if your sale is interstate Sale.

Rajesh (Mgr) (31 Points)
Replied 11 May 2012

1) My understanding is that composite schemes have a upper limit on sales. I expect my sales to be in the Rs 2 cr - 3 cr range and therefore i assume i will not qualify under that scheme.

2) Thanks for the confirmation

3) What would need to happen for me to be able to bill from a state like karnatake where vat is 5%? i.e. Can i open a registered office there and bill at 5%? Or do i need to ship the goods there and only then will the 5% cst be applicable.

Thanks!!!

Akash Jain (CA Final Student) (261 Points)
Replied 11 May 2012

1)As per your reponse ur sales limit going up you are right u do not qualify for composite scheme.

3) If you open ur office and incurr such capital expense just to save your some amount of VAT/CST thats not going to be fruitful as it looks u need to sell in maharastra and your paper work will also increase .

Rajesh (Mgr) (31 Points)
Replied 11 May 2012

Thanks for #1 and #2

Since the difference in VAT rate between Karnataka and Maharashtra is 7.5% (5% Vs 12.5), then 2 cr x 7.5% = 15 lacs [since I have to pay the full VAT rate]

I can easily open an office in Karnataka. But the question is does the inventory/mobiles need to be there? Or can I bill from Karnataka with a registered office with the inventory in Maharashtra itself.

Thanks!