Vat tax
ikramuddin
(Querist) 31 July 2012
This query is : Resolved
Dear Sir, My friend's brother is registered junk dealer,he purchase scrap from unregistered persons in Rs.44/- kg.
& Sale it rs.45/- per kg. by Tax invoice(Tax Rate is 5%), hence, his profit is Re.1/- per kg.
in June month- He purchase 20000kgs. scrap@44/-of Rs. 880,000/- , Sale it @45/- in Rs.900000/- (indirectly his profit is Rs.20000) but he paid VAT Rs. 45000/@5% on Rs.900000/- now his los is Rs.(45000-20000)25000/- Now my question is how he should billing or business? Hence his C.A. says billing (sale) should be rs.45/-(Actual Rate) per kg.
Sankaranarayanan
(Expert) 31 July 2012
what is the exact problem. you said you bought that material of 20000 kg @ 44= 880000 and paid tax @5% =44000
you sold the same @45 =900000 and collect the tax for the above is rs 45000
here 1000 (44000-45000) is the tax you going to pay from your profit
