Hello,
I wish to know what is the VAT applicability if I purchase and sell to the same party, i.e. my supplier is also my customer.
For e.g. if I buy something from Mr. A goods worth Rs. 1 lac and after sometime sell exactly of the same value to the same Mr. A, in this scenario what do I do pay his bill including VAT and also deposit the VAT collected from sales to Mr. A in the bank? Please advice.
Regards.
Dear Bhavik
If you are registered under VAT then sale of any taxable goods is chargable to VAT. We will take your example only. When you buy goods which are taxable worth Rs.1 lac from A, he will charge you vat. When you will sale goods worth Rs.1 lac to A then, You have to charge vat and deposit the same with the Government Treasury within duedate. You can utilise the credit of VAT paid on purchases from A.
If your case falls into return of the goods purchased from Mr.A then, it will be a different case.
I have a query in relation to the above case :
What is VAT ?
TAX on value added ( VALUE ADDED TAX )
In the above case there is no value addition when goods are sold back to A .......
No gross profit addition or nothing else ??
So how come VAT ????????
VAT is charged on transfer of ownership of goods i.e. sales
Though there is no value addition by the dealer, if dealer holds Registration Certificate then, he needs to charge VAT and pay to the Government.
For e.g. If used Assets are sold by the Dealer, though dealer is selling the same below the cost for which he acquired, he needs to charge VAT and pay to the Government.
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