hi,
Kindly tell me whether the cost of Adhesive materials used in the manufacturing of Ship is a direct material cost subject to VAT or comes under direct expense.
Thanking you
baiju
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Sales tax
Replies (1)
Understand from your query, that you manufacture ships for sale. It this is true, then Adhesive used in the manufacture is material used for manufacture of the ship. VAT is not be be separately charged on "Adhesive" when the ship is sold charging VAT as applicable. However, VAT is to be paid on the purchase of Adhesive by you. This amount of VAT can be claimed as Input Tax Credit.
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