Hello Sir, I am from Gujarat, Ahmadabad. I just started importing radial truck tyre from china. As per my understanding Gujarat have 15% VAT on tyre sell. So my confusion is how it will calculated. As I am aware there will be no multiple tax on single item so I need to pay import duty on full amount and VAT on profit margin. So can someone please clarify how it will calculated, Suppose, 2 tyre cost (CIF) is 260 USD (RS 17,940) Import duty (30%) 78 USD (RS 5,382), So final cost is 260+78 = 338 USD (RS 23,322). So my Question is VAT calulated Like this I sell tyre on 25,000 so my profit is RS 1,678 (25,000-23,322) so VAT will be 15% of profit (1678) which is 251 RS when I sell tyre. Or VAT will be Like this 15% on full value of sell price 25000, which is 3750 which is too high, Please can anybody confirm this? Regard. Ram Manek
Ram Manek Ji
While you are paying import duty (custom duty) u are also paying VAT as SAD(Special additional duty) in custom duty
Thus from ur out put tax 3750 u can adjust SAD
And have to pay balance Tax
same as if u buy in India from a registered dealer and getting vat input
Thank you Lalit, I am paying following duty on imported goods 10% Import duty 1% Landing charge 12.5% Countervailing duty 3% CESS 4% Additional Countervailing duty http://www.cybex.in/indian-custom-duty/hs-40112010.aspx So against what duty I can adjust VAT? Thank you in Advance, Ram Manek
4% is Compensatory duty for Vat
12.5% is compensatory duty for Excise
thus You can take credit of 4% Additional Countervailing Duty
As I am importing and selling on same state so there are no Excise but there are vat 15% so I can only take credit of 4% only? are you sure in this?
Excise Duty Levy on Manufacturing not on sale, thus its not matter whether sales is inter state or intra state,
excise duty is levy for safeguard of Indian Manufacturing industries of same type of product
vat levy for safeguard of Indian Traders of same type of product
You are trader thus you can take benefit Vat and after GST you can get credit of Excise portion also
Hello Ram Sir,
Vat will be calculated on the entire Sales Amount. So in your case on the entire 25000/-.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Dear Sir,
You have to pay VAT on sales value I.e. on INR 25000.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
