I am starting up a new store through which I'll buy and sell used electronic goods such as mobiles, laptops, ipads, etc. A customer can bring his/her old mobile phone to me and I'll offer him/her store credit or cash in lieu of the mobile phone. The customer can then use the store credit or cash to buy a different item from my shop. My question is how will the VAT be calculated in this case? Do I have to pay VAT on the entire sale value of the item or can I claim a rebate on the amount I paid to the customer as cash or store credit?
Info - The store would be located in gurgaon and products will be sold all India.
Any kind of help is highly appreciated.