A person sells iron bars at rs.100
He charges VAT on Rs.100 @ 5% i.e rs.5
Then he passes a debit note of rs.30 in the name of purchaser for late payment by him
VAT is not charged on such excess amount
I accept that it is late payment charges and and not subject to VAT
but if we consider substance over form he is practically selling the product at rs.130
Such income of late payment fees is highly material in case of this assessee
Is there any possiblity of charging VAT on this amount of rs.30
Please provide me with proper case law or relevant section
CAclubindia
