sir,,,
the question of taxation of june pcc 09 IS as follows.
question no.7(A)
Compute the VAT amount payable by Mr. A who purchases goods from a manufacturer
on payment of Rs. 2,25,000 (including VAT) and earns 10% profit on sale to retailers.
VAT rate on purchase and sale is 12.5%
I HAVE CHECKED MANY SOLLUTIONS,,EVERYONE HAVE CALCULATED THE ANSWER BY TAKING 10% GP MARGIN ON COST,EVEN ICAI IN ITS SUGGESTED ANSWERS..
BUT ITS CLEARLY GIVEN 10%GP ON SALE TO RETAILER IN THE QUESTION..
SO WE SHOULD CALCULATE SALE CONSIDERATION LIKE THIS-
200000(PURCHASE PRICE)+10% OF X=X
ASSUMING X AS SALE CONSIDERATION
OR LIKE THIS-
200000+10%OF 200000=220000??????
Menu
PLEASE SORT OUT THIS....
Replies (14)
cost of purchase 200000x10%profit=20000
cost 200000+profit 20000=assessable value220000
assesable value 220000X12.5% =Vat 27500
BUT ITS CLEARLY GIVEN 10%GP ON SALE TO RETAILER IN THE QUESTION..
IT MUST BE LIKE THIS I GUESS
200000+10%OF X=X
200000=X-10%OF X
200000=90%OF X
200000/90*100=X
SALES PRICE=X=2,22,222.22
Question 7 (a) Compute the VAT amount payable by Mr. A who purchases goods from a manufacturer on payment of Rs. 2,25,000 (including VAT) and earns 10% profit on sale to retailers. VAT rate on purchase and sale is 12.5%. (3 Marks) (b) An unregistered “service provider” provides following details in respect of taxable services provided during the financial year 2008-09: Date Particulars Amount (Rs.) 30.6.2008 Advance received from a customer 1,00,000 PROFESSIONAL COMPETENCE EXAMINATION: JUNE, 2009 42 30.9.2008 Part payment received against a bill of Rs. 9,50,000 raised on a customer 5,00,000 31.12.2008 Money received against taxable services provided during December, 08 3,00,000 31.1.2009 Taxable services rendered during January, 09 1,00,000 31.3.2009 Taxable services rendered during March, 09 2,00,000 The service tax provider complies with the provisions of registration and collection of service tax as per service tax laws. He gets registered during the year. He received the money against the bills raised during the month of January and March 2009. Compute the service tax liability of service provider for the year 2008-09 considering service tax @ 12.36%. (3 Marks) Answer (a) Computation of VAT payable by Mr. A:- Amount (Rs.) Payment made to manufacturer 2,25,000 Less
: VAT paid (2,25,000 x 12.5)/112.5 25,000
Add Sale price before VAT 2,20,000 Add Invoice value after 10% profit margin 2,47,500 VAT charged in invoice 27,500 Less VAT payable by Mr. A 2,500
Purchase price 2,00,000
see by this link question no.7(a)
https://www.icai.org.in/resource_file/17267pcc_sugg_paper_june09_5.pdf
THAT I TOO KNOW ABOUT THE ANS.
BT I M SAYING THE ANS MUST BE IN ACCORDANCE TO THE STATEMENT...AND IN STATEMENT ITS CEARLY GIVEN THAT PROFIT OF 10% IS ON SALE.....
profit on sale its right but vat credit avail. then cost is 200000 add profit 10% then after that 12.5 vat should be charged its a practice way.
YAAR BT MY QUESTION IS THAT
IS MY METHOD 2 IN ACCORDANCE WID STATEMENT IS RIGHT OR NT???
profit will be 22222/-
simply calculate na 200000/90 *100 =222222.
222222-200000=22222
ram avatar is right
tax par has to be bifurcated in all the cases
vat paid on purchases shall be directly taken to give credit, that is belongs to govt.
hence the profit shall be calculated on cost of purchases.
I M AGREE WITH THE ANS OF RAM AVTAR SINGH,
VAT PAID ON PURCHASE IS NOT TAKEN AS COST
SO COST = 225000 * 100/112.5 = 200000
AND SALES = 200000+10% = 220000
VAT ON SALES = 220000*12.5% = 27500
AND VAT PAYABLE = 27500 - 25000 = 2500 (INDIRECTLY i.e PROFIT*VAT RATE ) = (20000*12.5%)
kanveer y dont u check institutes suggested ans dey r available on icai.org n u would get da exact ans...... dey wld be no need to ask every one den
Dear i hav already checkd dat...Bt m nt satisfied wid dere ans. Too..
Recent Threads
- Regarding cancellation of GST Number
- GST on business receipts pre -registration
- A Restaurant registered under the Composition Sche
- GST RATE OF OUT DOOR CATERING
- Non resident taxation & income tax in India
- GST Rate for oral Hygiene Combo Pack
- GST registration - Address error
- TDS on property pu
- Import of goods IMS action related
- Incometax Survey - Updated Return Filing after the
Related Threads
CAclubindia
