In a bill regarding purchase of any items, the supplier sometimes charges transportation charges and shows it in the bill itself. Bu tin the given manner,
( Basic amt + Transport charges ) + VAT = Final amt.
So, is this procedue correct? Coz i think Transport charges is not included in the basic amt for calculating VAT??
No, this method is not correct. Best method of invoicing is-[BASIC+VAT]+TRANSPORT CHARGES=TOTAL INVOICE VALUE.
Mr Aditya,
After introducing VAT law in all states transportation charges arre not given exemption from taxable turnover. So, what your seller has done is correct.....MJK
I agree with Mr MJK, the definition of "Sale Price" has been amended to include the value of Packing Forwarding, Transportation, Insurance etc. Therefore there is no exemption for transportation charges in the Sate VAT Laws.
The definition of "Sale Price" under the Central Sales Tax Act does not include Freight / Transportation and Insurance charges. Therefore Freight and Insurance need not be included in the value of goods on which CST is to be charged.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
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