LIVE GST Certification Course by CA Arun Chhajer. Register Now!!

Purchase from unregistered dealer

Ravindra (Article Assistant) (44 Points)

04 August 2011

I am working in a company situated in Gujarat, we have just purchased material from a dealer who did not leavy vat on that material i just want to know the following things:

(a) whether such dealer is unregistered dealer, as other dealer charge VAT on such material ?

(b) whether such transaction covered by "purchase from unreg. dealer" and as a result of which we have to pay purchase tax or not?

Reply
Follow
Share

9 Replies

Sagar Devani (Corporate and International Taxation) (1174 Points)
Replied 04 August 2011

a.) yes he is a unregistered dealer.

B.) Such transaction is covered under purchase from unregistered dealer.

c.) Sorry no idea about purchase tax,

1 Like

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 04 August 2011

Mr Ravindra,

Your question needs little clarity on the following.

1) What is the product name and descripttion

2) Whether his VAT registration number is printed in the tax invoice to know he is registered or unregistered

3) Go to the Gujrat tax website and findout whether he is active dealer and you can get the party's tin number. Or go to TINXYS search engine.

According to the act, even registered dealer can sell the product without tax if the product is exempted from VAT in the state of selling. Finally let us assume your party is unregistered dealer and in this case purchse tax is leviable based on the product schedule and the same can be set off in the payment due on your end product.

rengaraj r.k

Ravindra (Article Assistant) (44 Points)
Replied 04 August 2011

Thanks Mr. Rangaraj,

Here are clarification needed by you:

(1) Material : MS Reducer [i.e. Connector of conecting two pipe (Steel) having different dia ]

(2) Other delar charged VAT on such material;

(3) There is no VAT or other registration no. on the invoice produced by dealer;

I just want to know what is the rate of purchase tax on such material & i want to know the following things also:

(a) Whether on such purchase tax Vat credit can be availed by us?

(b) If it is purchase from unreg. delar & we set off such purchase tax from the payment, then how this liability of purchase tax to be discharged [i.e. by normal vat challan (or different challan or return for such purchase tax)]

(Guest)

sorry but sir

what is purchase tax???

Is it different from VAT ???????????

Ravindra (Article Assistant) (44 Points)
Replied 05 August 2011

Hi Mr. Vijay,

I don't much more about purchase tax but broadly i know about it is that if we purchase any material which is subject to VAT, from unregistered dealer under vat act, then we have to pay tax either by deducting such tax from the payment of supplier or out of our pocket, such tax is called purchase tax

Nitin Grover (CS) (1228 Points)
Replied 06 August 2011

Dear Friend

Doesnt matter he is registered or unregistered dealer. If he has not issued Tax Invoice you can not take VAT Incput Claim. (Tax Invoice can issued by Registered Dealer only).

If he is registered and adopted Composite VAT Scheme then also he can not issue Tax Invoice.

Tax Rates as per state.

Feel free to ask any further query relates with VAT, ROC, Income Tax, etc or work

Regards

CS Nitin Grover

+91-9582009494

CA Pratik Bangad (Consultant) (25 Points)
Replied 21 June 2012

Hi guys i had a query about purchases from an Unregistered Dealer. I m working with an infrastructure company and they do have large volume of purchases from URD. Is the company liable to pay VAT on these Unregistered purchases???

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 21 June 2012

Mr Pratik Bangad,

This infrastrucure company is registered under vat for works contract? Normally all unregistered purchases meant for manufacturing/process or resale are subject to purchase tax and after paying the same it can be adjusted in the output tax. In tamilnadu, the purchase tax which is due to be paid this month on URD purchases gets adjusted in next month automatically.

Please refer your state vat laws.

rengaraj r.k