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Mou with manufacturer

Agreement deeds 676 views 2 replies

Ramakrishnan20

MBA

24 Points Posted on 16 June 2014

Hello everyone

This is ramakrishnan , I own a trading / Export company (B in my case).

I have got an order from a Company C(foreign company which is registered in India).I have to buy a product from the manufacturer (A) and sell the same to the Company C.

In this A to B to C transaction, I have sales tax issue so my questions are

1) can I sign a Mou with the manufacturer to elimate these sales / Vat taxes.

2) or if I lease a manufacturing plant , It would be B To C which would be a solution ?

Note : Company C exports the product they buy from us (B)

Waiting for ur replies

thanks

Replies (2)

Mihir

Wealth Manager

5293 Points Posted on 17 June 2014

Signing an MoU with A will have no effect on sale tax issue. You are purchasing goods from manufatcturer A, then you sell it to foreign company C. Whatever sale tax is applicable in such transactions, it has to be paid. Leasing a manufacturing unit, too, make no difference. It seems the tax is eating away your margins.