• Query regarding VAT

I have Patanjali outlet where I sell FMCG with MRP, purchased from the distributer who charges me VAT on all the goods provided. Since I have already paid for VAT am I suppose to pay VAT again on the sold goods  by registering for the same? How do I charge VAT to the customers since no one will pay more than MRP.
Asked 7 years ago in VAT

Dear Sir,

You are supposed to charge VAT if your turnover exceed 5lacs/10lacs during the year.

You don't need to pay entire VAT which you charge from customer to the govt. So your margin is not getting thin. You need to pay only the differential amount to the govt. (I.e. vat charged from customer less vat paid to distributor)

Please feel free to call/revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hi,

if you are register for VAT then you can claim input credit for what ever vat you pay to distributor.

Yes, MRP is the maximum that you can charge to your customer. and it is inclusive of VAT amount.

it is better to register so that you can claim input vat and reduce your VAT liability.

Vishakha Agarwal
CA, Bangalore
448 Answers
85 Consultations

5.0 on 5.0

Hello Sir,

The MRP itself is inclusive of VAT. So technically you cannot charge VAT separately from your customers. The VAT component is already included in your Sales price with your margin.

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

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

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