Purchase from Exempted Unit

you have to charge full vat and pay full vat as input credit is not available to you. 

but the thing is dat

our client Purchased good from Dealer who purchased goods from Manufacturer (AKAI)

wher Manufacturer is a Exempted Unit but dat  Dealer also does not charge any Vat to our Client

so Our Client is Liable to charge Vat to customers ?

Originally posted by : ANWAR
	but the thing is dat our client Purchased good from Dealer who purchased goods from Manufacturer (AKAI) wher Manufacturer is a Exempted Unit but dat  Dealer also does not charge any Vat to our Client so Our Client is Liable to charge Vat to customers ?

1st dealer is either unregistered or availing any conditional exemption e.e. composition scheme. 

1 dealer i.e Manufacturer is Exempted bcoz he is manufacturing in SEZ

SEZ is exempted unit for export only, but DTA sales attract VAT / Excise. perhaps they have not followed the rules correct way. 

Dear Anwar,

You have to claim deduction as per Rule 57 (2) of the MVAT Actthat is eauivalent to the purchase price of goods purchased from Exmepted Unit and on balance amount only VAT is to be charged at applicable rate.

For Example purchase value from Exampted unit say Rs. 100/- and sale value Rs. 125/- Then VAT is to be charge no sale value less deduction U/R 57(2) i.e. purchase price i.e. in this case VAT is to be paid on Rs. 25/- only.

This deduction is available to all dealers

If purchase is Emempted then less it in sale amount. calculate vat on balance sale amount after deducting purchase value

Exemption available for SEZ Unit dealers if there is inter unit transfer i.e. from one Unit of SEZ to another Unit of SEZ of SEEPZ  as declared by state govt. if Manufacturer selling good to to dealer other than such units then he has to collect vat/ cst if goods are taxable.

Please confirm that goods which are sold are coverd under catagory or not, if not then you have to collect tax from purchaser.