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Kvat by principal

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Sudarshan

Accountant

24 Points Posted on 25 June 2013

Sir

We are Trading in Commodities through National Spot exchange through a broker. He deals with my purchase, sales, issue of invoice , tax collection, payment and returns and charge a brokerage. I as principal what are my obligations under KVAT ?

1 ) I am not registered under KVAT as I don't do any other business in this firm.

2 ) Should I show both purchase and sales as per contract note issued by my Agent/Broker ?

3 ) If so should I also show the Input VAT and Out put VAT in my books of account.

4 ) As a principal should I keep a copy of VAT returns filed by my agent ?

5) Can I show Input VAT and Out Put Vat in my books if I am not a registered dealer under VAT.

Please let me know as I have to close my books for last year.

Regards

Sudarshan

Replies (1)

MJ Krishnamurthy

ACCT(Retd)

5757 Points Posted on 26 June 2013

Mr Sudarshan,

As a trader,when your turn over crosses the threshold mark i.e. Rs 5 lakhs, you have to register under KVAT Act 2003. You can run the business either entirely or in part through an appoited agent(such as in RMC yards,auction centres etc).Your agent can issue invoices,collect taxes,submit returns along with tax payments,as the agreements,on your behlf. He has to send a copy of all these documents for your record.If you are registered you may declare the same turnover done by your agent and claim exemption U/s 8 of KVAT Act.For any offences committed by the agent you will also be jointly resposible........mjk