Vat on handling charges

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My Supplier Is Charging VAT on Handling Charges is it Correct ? Please reply  

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He is not correct..........

Please narrate with an example so as to give the correct reply.  

VAT is payable on sale of goods and determining the sale price is crucial to arrive at the taxable turnover liable for VAT. All the State Acts do provide for deductions from total turnover viz., discounts etc., With this background consideration relatable to goods upto the time when goods are sold (till transfer of property in goods) collected by the seller for contract of sale are to be treated as part of taxable turnover.

 

In the case on hand, if handling charges collected by the seller before transfer of property, value of such charges will form part of taxable turnover and if such charges are not relatable to goods which are sold & if these services are provided after sale, handling charges will not form part of taxable turnover. 

 

 


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