Sale price

As per section 2(zg) , sale price means :

•The amount of valuable consideration received or receivable by a

  person for any sale made

• including any sum charged on account of

a) freight

b) Storage       

c) demurrage

d) Insurance

e) Any sum charged for anything done by the person in respect

                of goods- At the time of  OR

                            - Before the delivery there for

• As per Explanation 4, sale price shall include excise duty under ,

 Central Excise Act and Punjab Excise, whether paid or payable by

 seller or buyer or any other person

•However sale price shall not include tax paid or payable to a person

 in respect of sale.

Note: On goods sold before registration which no tax is

Payable to dealer,  tax should be calculated on gross amount of such sale and not amount calculated after deducting tax.

Deductions from Sale Price Rule 15

§A) Turnover of goods declared tax free u/s 16

§B) Turnover of sale of goods made outside state, or in course of interstate trade or commerce or in course of import of goods into or export of goods out of territory of India u/s 84.

§C) Goods Sent on Consignment basis or Branch Transfers

§D) Amount of Interest in case of hire purchase transaction or installment sale

§E) Cash discount or trade discount in accordance with regular trade practice

§F) Sale price of taxable goods where sale is cancelled. Provided that person is in possession of all copies of VAT Invoice or retail Invoice.

§G) Sale Price of Goods returned in six months only against debit note issued by purchaser of goods returned.

§H) Tax Fraction on sale where sale includes retail sales.

§Deduction against E,F, G i.e. discount, cancelled sale, sale return to be allowed in period in which event takes place. I

§If it results negative sale , the balance shall be allowed in immediate subsequent period.

Note:

      - This means that by negative sale one can not increase ITC or refund.

      - Further, if in immediate subsequent period , the period of six months expires, whether sale return shall be allowed

Sale Price for Petrol and Diesel Retail Outlets

§As per Explanation 8 added wef 28-3-08, the amount received or receivable by oil companies shall be deemed to be equal to price on which retail outlet shall sell goods to the consumer.

§Hence full tax stands paid in the hands of oil company and retail outlet need not pay further tax.

§As per ETC order dtd 26.4.10 in case of Behal & Co. and Doaba Filling Station, filling stations are there fore not required to charge VAT or claim ITC.

§Return in VAT-15 amended to give effect to this order.

Deduction of rebate by deducting it from VAT Invoice

§

The question was  asked from ETC as to whether if incentives received from suppliers are passed on to customers by deducting rebate from VAT Invoice, whether vat liability can be reduced.

§However ETC didn’t reply the question saying that Rule 15 be followed

Supply of Medicines, Implants etc. by Hospitals

§Medicines, Implants and stents administered to a patient admitted to a hospital for medical procedures like open heart surgery, angiography, knee surgery, hip replacement amounts to sale

   (Fortis Hospital ETC order 10-08-2005)

§ Kacha Arhtiyas

Kacha Arhtiyas do not collect vat on agriculture produce on transactions undertaken by kacha Arhtiyas even though goods dealt with are not dealt under Schedule H. Hence there is no tax liability.

(Kesho Ram Ramesh Chand ETC order 31-10-05)