Please Help: VAT Treatment in case of Subsidy
Posted Date : 28-Mar-2014 , 04:03:30 pm | Posted By: Vijeta Nathani
Category :
VAT | Answers :
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Comments :
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I have a query how to calculate VAT in case of Subsidy.
For example, Mr.A is purchasing goods worth rs.1,00,000 by paying CST. He has received subsidy from state government for the said transaction for rs.30,000. He sells goods to intra state registered dealer. Whether he should charge VAT on Rs.1,00,000 and then give credit note for the subsidized amount i.e. Rs.30,000. Or he can Net off the amount and can charge VAT on Rs.70,000(1,00,000-30,000)?
Please, Assist for the same.
Regards,
Vijeta
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| Posted By : Kusuma |
01-Apr-2014, 01:07:23 |
| VAT should be imposed on the selling price to Mr.A i.e the amount mentioned in the invoice of Mr.A. It should not be on 70000 and 100000 |
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| Posted By : Vijeta Nathani |
29-Mar-2014, 03:41:30 |
| Actually, My client is purchasing for solar plan and subsidy has been provided by state government. Second thing, He is supposed to pass on subsidy to next contractor. He has received invoice like.. 100000 rs cost+2000 rs CST = 102000 total cost - 30000 (subsidy) = 72000rs to be paid. |
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| Posted By : Vijeta Nathani |
29-Mar-2014, 03:33:07 |
| Actually, My client is purchasing for solar plan and subsidy has been provided by state government. Second thing, He is supposed to pass on subsidy to next contractor. He has received invoice like.. 100000 rs cost+2000 rs CST = 102000 total cost - 30000 (subsidy) = 72000rs to be paid. |
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| Posted By : |
29-Mar-2014, 01:49:33 |
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| Posted By : |
29-Mar-2014, 01:47:42 |
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| Posted By : |
29-Mar-2014, 01:43:56 |
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| Posted By : |
29-Mar-2014, 01:07:48 |
| Dear,
When you make a sale you would be required to charge VAT on complete amount of Rs 100000.00 and there won't be any need of issuing any credit note.
When you make your Balance sheet the 30000 received as subsidy would be adjusted against your purchases.
there wont be any impact on VAT as the purchase its a CST Purchase.
In case of further query
CA Gaurav MIttal
+91-9971312299
mittalgaurav05@gmail.com |
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