Dear friends, I am running a retail business with approx turnover of 15 lacs. I am not a registered vat dealer i also know that it is necessary to be registered if your turnover exceeds 5 lacs in any year. Now the problem is that i have to pay vat on sales made and avail credit on inputs. But the profit margin in my trade is minimum, only 6-7% on mrp, again it is not possible to charge vat from the customers above the maximum retail price, so ultimately i am the victim and have to pay the tax amount on sales out of my pocket. I am confused what should i do? please help....
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Please help!
Replies (2)
Under VAT Scenario, you have to pay VAT only on Value added portion. Say 5% product you are dealing, and you are earning margin of 6%, you have to suffer VAT only to the extent of 6%X5%= 0.30%. That means you will get margin even after paying VAT 5.70%. 'Pay Tax and Sleep well without any tension' that is the government policy, I strongly belive on that.
Dear Ronit, yours is a small business just like mine. I have 5 employees and my turnover is less than 20 lakhs. As per your query, you have to pay VAT only for the portion that is value added. If you are still confused, you can go through this site thet helped me tremendously. Sharing the link here: https://bit.ly/money-finance.
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