Profit from sales and Taxes

Friend ,

Actually your query is very obvious.

1) VAT

VAT is Indirect Tax and you are shifting your burden to end user.

It means you are not paying a peny from your own pocket as VAT on Sales to Indian Government. 

You are paying VAT in case of Purchases of Commodity & you get a VAT Credit when you sale that article. Only the difference you have collected had to be paid to government.

2) Income Tax

Income Tax is a Dirct tax and it is our own burden it cannot be shifted.

It means now you are paying taxes to the government on the Income(Profit).

Conclusion:-

From above discussion we can easily conclude that VAT and Income Tax are different and we cannot shift the credit of one another.

good explanation by NIKHIL                      

Thanx But i was looking for a good suggestion.

VAT & sales tax are two different things... its ri8 that one is indirect n the other is direct. but the main difference is that Vat is collected by state govt.as they have the power and each state have their own act,rules and regulations..they also have their own VAT rates. Income tax is collected by central govt. and state govt.do not hold any power.. Also Vat is ACTUALLY paid by the FINAL CONSUMER..its d supplier who acted on their behalf...And IT is paid by the person who earned more than basic exemption limit for the privious year...

Thanks everybody!!! but whole idea behind my query was, isn't application of Income Tax is actually on coming on VAT (after CENVAT). If I'm not wrong, I would be paying Income Tax on VAT as well.

you will not be paying income tax on VAt amount.

Income tax is not levied on sales but on profits, and the VAT you deposit to the state government is allowed as expenditure. Further also the VAT paid on purchases is added to the cost of purshases as per tha tax laws