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Vat charged on mrp

VAT (Legacy) 9095 views 7 replies
hello friends i have purchased a product having MRP as Rs1000 and the store gave me discount of 40%. After giving the discount they are charging VAT @ 5% on the discounted price i.e. On Rs 600. So can they charge VAT extra on Rs 600 as according to me this is MRP. Please guide me if i m correct or not and should VAT be charged??
Replies (7)

VAT been charged correctly on Rs.600/- VAT to be charged on the sale considaration not on MRP.only in excise on some notified products ED will be lavied on MRP not VAT.and it also need to see that MRP inclusive of tax or not. if it is inclusive than they should not charge.

"and it also need to see that MRP inclusive of tax or not. if it is inclusive than they should not charge."

i didnt get you what you wanted to convey by this line..pls breif me on this.

Look at MRP tag

MRP (Local Taxes Extra), otherwise he can not charge on it

no it was inclusive of all taxes..

still he had charged 5% extra on selling price of Rs600.

 in my view it should not be added.

Mr.Prateek,

It depends on the VAT Act and Rules. For eg, in Karnataka for Pharmacetical Dealers, dept has give provision to Pay Tax on MRP(A separate return has to be filled Form VAT 105) or to collect tax on actual price(regular vat return Form VAT 100).

As per the above example given, it is falling under regular VAT Scenario. Hence, VAT needs to be calculated on Rs. 600/- only.

Also others comments are welcome.

 

with regards,

Subramanya

 

The rules are not clear yet.

There many questions not answered ,like rile of trasporter .


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