MCOM PART 2 PROJECT OF MVAT CEN VAT.docx

7/25/2019 MCOM PART 2 PROJECT OF MVAT CEN VAT.docx

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PROJECT REPORT ON

CEN VAT V/S M-VAT

Submitted in partial fulfillment of te re!uirement

"or

MCOM PART ## SEM - #V

$%&'(-%&')*

+,

M#SS RAJES.R# 01#R#

2nder te 3uidan4e of M#SS AN2RA0.A PARMAR

2N#VERS#T, O" M2M+A#

SHETH T.J.EDUCATION SOCIETYS

S.ET. N5TT CO66E1E O" COMMERCE 7

S.ET. JTT CO66E1E O" ARTS8 T.ANE 9:EST;


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SHETH T.J.EDUCATION SOCIETYS

SHETH N.K.K.T COLLAGE OF COMMERCE &

S.ET. JTT CO66E1E O" ARTS

CERT#"#CATE

Ti< i< to 4ertif= tat M#SS RAJES.R# 0.ARMEN0RA 1#R# of

M4om Part ##8


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0EC6EARAT#ON

# RAJES.R# 0.ARMEN0RA 1#R# ere b= de4lared tat pro@e4t report

entitled COMPARAT#VE ST20, O" CENVAT V/S M-VAT

under te 3uidan4e of M#SS AN2RA0.A PARMAR


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AC5NO:6E01MENT

# ta?e ti< opportunit= to eDpre


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CONTENT

Sr No Topi4< Coered Pa3e No

CERT#"#CATE '

0EC6EARAT#ON %

AC5NO:6E01MENT F

Se4tion # Value Added TaD in Maara&

Se4tion ### AppendiD >'->F

Se4tion #V Con4lu>

Se4tion V +iblio3rap= >(


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:.AT #S VA62E A00E0 TAI

Value Added Tax is a !"ad#ased $"%%"di' ax (a is le)ied a %uli*le sa+es ",

*!"du$i"-. T(e $"-$e* is ai- " ex$ise du' *aid ' (e %a-u,a$u!e! /("0 i- u!-0 $lai%s a

$!edi "- i-*u axes *aid. Ex$ise du' is "- %a-u,a$u!e0 /(ile VAT is "- sale a-d "( /"!

i- (e sa%e %a--e!0 a$$"!di-+ " (e /(ie *a*e! "- VAT !eleased ' ,i-a-$e %i-ise!

C(ida%a!a%. T(e d"$u%e- /as d!a/- u* a,e! all saes0 a!!i-+ U10 /e!e *!e*a!ed "

i%*le%e- VAT ,!"% A*!il. I is usuall' i-e-ded " e a ax "- $"-su%*i"-0 (e-$e (e

*!")isi"- ", a %e$(a-is% e-ali-+ *!"du$e!s " ",,se (e ax (e' (a)e *aid "- (ei! i-*us

a+ai-s (a $(a!+ed "- (ei! sales ", +""ds a-d se!)i$es. U-de! VAT !e)e-ue is $"lle$ed

(!"u+("u (e *!"du$i"- *!"$ess /i("u dis"!i-+ a-' *!"du$i"- de$isi"-s.

:., VAT #S PRE"ERRE0 OVER SA6ES TAI

2(ile (e"!ei$all' (e a%"u- ", !e)e-ue $"lle$ed (!"u+( VAT is e3ui)ale- " sales ax

$"lle$i"-s a a si%ila! !ae0 i- *!a$i$e VAT is liel' " +e-e!ae %"!e !e)e-ue ,"!

+")e!-%e- (a- sales ax si-$e i is ad%i-ise!ed "- )a!i"us sa+es "- (e *!"du$i"- 4

dis!iui"- $(ai-. 2i( sales ax0 i, ,i-al sales a!e -" $")e!ed ' (e ax s'se% e.+. due "

di,,i$ul' ", $")e!i-+ all (e !eaile!s0 *a!i$ula! $"%%"diies %a' -" 'ield a-' ax.

H"/e)e!0 /i( VAT s"%e !e)e-ue /"uld (a)e ee- $"lle$ed (!"u+( axai"- ", ea!lie!

!a-sa$i"-s0 e)e- i, ,i-al !eaile!s e)ade (e ax -e.

I- addii"-0 (e audi !ail (a exiss u-de! (e VAT s'se% %aes i a %"!e e,,e$i)e ax i-

ad%i-is!ai"- e!%s (a- sales ax as i (el*s /i( (e )e!i,i$ai"- ", VAT a%"u-s de$la!ed

as due. T(is is %ade *"ssile ' (e ,a$ (a "-e *e!s"-5s "u*u is a-"(e!5s i-*u. As /i(

sales ax i%*"!s a!e !eaed (e sa%e /a' as l"$al +""ds /(ile ex*"!s a!e 6e!"# !aed "

a)"id a-i#ex*"! ias.


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N"/i(sa-di-+ (e ad)a-a+es %e-i"-ed a")e0 i is /"!( -"i-+ (a VAT is a

$"-side!al' $"%*lex ax " ad%i-ise! $"%*a!ed /i( sales ax. I %a' e di,,i$ul " a**l'

" s%all $"%*a-ies due " di,,i$ulies ", !e$"!d ee*i-+ a-d is $")e!a+e i- a+!i$ulu!e a-d

(e se!)i$es se$"! %a' e li%ied. T" $")e! (e (i+( ad%i-is!ai"- $"ss0 VAT !aes ", 78#

98 *e! $e- a!e +e-e!all' !e$"%%e-ded. T(e e3ui' i%*a$ ", (e !elai)el' (i+( !aes (a)e

ee- a $ause ,"! $"-$e!- as i is *"ssile (a (e *""! s*e-d !elai)el' (i+( *!"*"!i"-s ",

(ei! i-$"%es "- +""ds su:e$ " VAT. T(us (e $"-$e* ", 6e!" VAT !ae "- s"%e ie%s (as

ee- i-!"du$ed.

0#""ERENCE +ET:EEN VAT AN0 CST

U-de! (e CST A$0 (e ax is $"lle$ed a "-e sa+e ", *u!$(ase "! sale ", +""ds. T(e!e,"!e0

(e u!de- ", (e ,ull ax "-d is "!-e ' "-l' "-e deale!0 ei(e! (e ,i!s "! (e las deale!.

H"/e)e!0 u-de! (e VAT s'se%0 (e ax u!de- /"uld e s(a!ed ' all (e deale!s ,!"% ,i!s

" las. T(e-0 su$( ax /"uld e *assed u*"- (e ,i-al $"-su%e!s.

U-de! (e CST A$0 (e ax is le)ied a a si-+le *"i-. U-de! (e VAT s'se%0 (e !eaile!s a!e-" su:e$ " ax ex$e* ,"! (e !eail ax.

U-de! (e CST A$0 +e-e!al a-d s*e$i,i$ exe%*i"-s a!e +!a-ed "- $e!ai- +""ds /(ile VAT

d"es -" *e!%i su$( exe%*i"-s. U-de! (e CST la/0 $"-$essi"-al !aes a!e *!")ided "-

$e!ai- axes. T(e VAT !e+i%e /ill d" a/a' /i( su$( $"-$essi"-s as i /"uld *!")ide (e

,ull $!edi "- (e ax (a (as ee- *aid ea!lie!.

A (e ,i!s *"i- ", sale0 (e )alue ", +""ds is Rs.788. T(e ax "- (is is 79.;


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:.O 1A#NSI

Sae a-d Ce-!al +")e!-%e-s +ai- i- e!%s ", !e)e-ue. VAT (as i-#uil i-$e-i)es ,"! ax

$"%*lia-$e B "-l' ' $"lle$i-+ axes a-d !e%ii-+ (e% " (e +")e!-%e- $a- a selle!

$lai% (e ",,se (a is due " (i% "- (is *u!$(ases. E)e!'"-e (as a- i-$e-i)e " u' "-l'

,!"% !e+ise!ed deale!s B *u!$(ases ,!"% "(e!s /ill -" *!")ide (e e-e,i ", $!edi ,"! (e

axes *aid a (e i%e ", *u!$(ase. T(is !a-s*a!e-$' a-d i-#uil i-$e-i)e ,"! $"%*lia-$e

/"uld i-$!ease !e)e-ues. I-dus!' a-d !ade +ai- ,!"% !a-s*a!e-$' a-d !edu$ed -eed "

i-e!a$ /i( (e ax *e!s"--el. F"! ("se /(" (a)e ee- $"%*l'i-+ /i( axes0 VAT /"uld

e a ""- (a !edu$es (e $"s ", (e *!"du$ " (e $"-su%e! a-d ""ss $"%*eii)e-ess.

VAT /"uld e %a:"! l"/ ,"! ax e)ade!s0 "( %a-u,a$u!e!s /(" e)ade ex$ise du'

*a'%e-s a-d !ade!s /(" e)ade sales#ax.

:.AT66 +E T.E TA +2R0ENI

T(e ")e!all ax u!de- /ill e !ai"-ali6ed as i5ll e s(a!ed ' all deale!s0 a-d *!i$es0 i-

+e-e!al0 /ill ,all. M"!e")e!0 VAT /ill !e*la$e (e exisi-+ s'se% ", i-s*e$i"- ' a s'se%", uil#i- sel,#assess%e- ' !ade!s a-d %a-u,a$u!e!s. T(e ax s!u$u!e /ill e$"%e

si%*le a-d %"!e !a-s*a!e- a-d ax $"%*lia-$e /ill i%*!")e si+-i,i$a-l'. I /ill als" e

si%*le! a-d ",,e! eas' $"%*uai"- a-d eas' $"%*lia-$e. VAT /ill *!e)e- $as$adi-+ e,,e$

(!"u+( i-*u !eae a-d (el* a)"id dis"!i"-s i- !ade a-d e$"-"%' ' e-su!i-+ u-i,"!% ax

!aes.

:.O PA,SI

All deale!s !e+ise!ed u-de! VAT a-d all deale!s /i( a- a--ual u!-")e! ", %"!e (a- Rs ;

la( /ill (a)e " !e+ise!. Deale!s /i( u!-")e!s less (a- Rs ; la( %a' !e+ise! )"lu-a!il'.

.O: TO PA,I

VAT /ill e *aid al"-+ /i( %"-(l' !eu!-s. C!edi /ill e +i)e- /i(i- (e sa%e %"-( ,"!

e-i!e VAT *aid /i(i- (e sae "- *u!$(ase ", i-*us a-d +""ds. C!edi (us a$$u%ulaed

")e! a-' %"-( /ill e uili6ed " dedu$ ,!"% (e ax $"lle$ed ' (e deale! du!i-+ (a


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%"-(. I, (e ax $!edi ex$eeds (e ax $"lle$ed du!i-+ a %"-( "- sale /i(i- (e sae0 (e

ex$ess $!edi /ill e $a!!ied ,"!/a!d " (e -ex %"-(.

:.#C. 1OO0S :#66 +E TAA+6E 2N0ER VATI

All +""ds ex$e* ("se s*e$i,i$all' exe%*. I- ,a$0 ")e! ;;8 ie%s /ill e $")e!ed u-de! (e

-e/ ax !e+i%e0 ", /(i$( -au!al a-d u-*!"$essed l"$al *!"du$s /"uld e exe%* ,!"%

VAT. A"u 9>8 ie%s0 i-$ludi-+ d!u+s a-d %edi$i-es0 all a+!i$ulu!al a-d i-dus!ial i-*us0

$a*ial +""ds a-d de$la!ed +""ds /"uld a!a$ < VAT. u0 ,"ll"/i-+ "**"sii"- ,!"%

s"%e saes0 i /as de$ided (a saes /"uld (a)e "*i"- " ei(e! le)' < "! "all' exe%*

,""d +!ai-s ,!"% VAT u i /"uld e !e)ie/ed a,e! "-e 'ea!. T(!ee ie%s B su+a!0 exile0

"a$$" B u-de! addii"-al ex$ise duies /ill -" e u-de! VAT !e+i%e ,"! "-e 'ea! u

exisi-+ a!!a-+e%e- /"uld $"-i-ue.

OT.ER CONS#0ERAT#ONS

I is i%*e!ai)e (a *"li$' %ae!s i- $"-side!i-+ ad"*i"- ", VAT s("uld e i-e!esed i- (e

e$"-"%' /ide i%*a$ ", (is ax. S*e$ial e%*(asis is ",e- *la$ed "- is e,,e$ "- e3ui'0

*!i$es a-d e$"-"%i$ +!"/(. T(is is *a!i$ula!l' i%*"!a- e$ause ", (e *"e-ial e,,e$s "-

$"-su%*i"- ", $e!ai- $"%%"diies (a (a)e a di!e$ "! i-di!e$ e,,e$ "- la"u!

*!"du$i)i'.

VAT E""ECT ON #N"6AT#ON

I- $"-side!i-+ (e i-!"du$i"- ", VAT0 $"u-!ies a!e ",e- $"-$e!-ed (a i /"uld $ause a-

i-,lai"-a!' s*i!al. H"/e)e! (e!e is -" e)ide-$e " su++es (a (is is !ue. A su!)e' ",

OECD $"u-!ies (a i-!"du$ed VAT i-di$aed (a VAT (ad lile "! -" e,,e$ "- *!i$es. I-

$ases /(e!e (e!e /as a- e,,e$ i /as a "-ei%e e,,e$ (a si%*l' s(i,ed (e !e-d li-e ",

(e $"-su%e! *!i$e i-dex C1I. T" +ua!d a+ai-s a-' u-,"!esee- *!i$e e,,e$s (e au("!iies

%a' $"-side! a i+(e! %"-ea!' *"li$' sa-$e a (e i-!"du$i"- ", VAT.

0#STR#+2T#ON E""ECTS O" VAT


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Value added ax is /idel' $!ii$i6ed as ei-+ !e+!essi)e /i( !es*e$ " i-$"%e (a is is

u!de- ,alls (ea)il' "- (e *""! (a- "- (e !i$(. T(is e%a-aes ,!"% (e ,a$ (a

$"-su%*i"- as a s(a!e ", i-$"%e ,alls as i-$"%e !ises. He-$e a u-i,"!% VAT !ae ,alls

(ea)il' "- (e *""! (a- (e !i$(. T(is $!ii$is% is )alid /(e- VAT *a'%e-s a!e ex*!essed

as a *!"*"!i"- ", $u!!e- i-$"%e. H"/e)e! i,0 ,"ll"/i-+ (e *!e%ise (a /el,a!e is

de%"-s!aed ' (e le)el ", $"-su%*i"- !a(e! (a- i-$"%e0 $"-su%*i"- is used as (e

de-"%i-a"! (e i%*a$ ", VAT /"uld e *!"*"!i"-al. A *!"*"!i"-al u!de- /"uld als"

e de%"-s!aed i, li,ei%e i-$"%e !a(e! (a- $u!!e- i-$"%e is used. A li,ei%e i-$"%e

$"-$e* $"-side!s (e ,a$ (a %a-' i-$"%e !e$i*ie-s a!e "-l' e%*"!a!il' a l"/e! i-$"%e

!a$es as (ei! ea!-i-+s i-$!ease. I- "!de! " add!ess (e !e+!essi)i' ", VAT (e ,"ll"/i-+

%easu!es $a- e ae-

T(e VAT isel, $a- e used " di,,e!e-iae axai"- ", $"-su%e! ie%s (a a!e

$"-su%ed *!i%a!il' ' (e *""! su$( (a (e' *a' less "! a 6e!" !ae "! " ax luxu!' +""ds

a a (i+(e! (a- sa-da!d !ae.

VAT exe%*i"-s %a' als" e +!a-ed "- +""ds a-d se!)i$es (a a!e $"-su%ed %"sl'

' (e *""!.

E3ui' $"-$e!-s %a' als" e add!essed (!"u+( "(e! /a's0 "uside (e VAT s'se%0

su$( as "(e! ax a-d s*e-di-+ i-s!u%e-s ", +")e!-%e-. T(is $"uld e i- (e ,"!% ",

l"/e! asi$ i-$"%e ax !aes "- (e *""! "! s"%e *!"#*""! ex*e-diu!es ", +")e!-%e-. T(e

use ", %uli*le !aes ", VAT (as ("/e)e! ee- /idel' dis$"u!a+ed ,"! )a!i"us !eas"-s.

T(ese i-$lude

T(e ,a$ (a s"%ei%es i is al%"s i%*"ssile " di,,e!e-iae e/ee- (i+(e!

3uali' ex*e-si)e *!"du$s 4 e.+. ,""d0 $"-su%ed ' (e !i$( a-d "!di-a!' *!"du$s

$"-su%ed ' (e *""!. T(us a-' $"-$essi"-s exe-ded %a' e-d " e-e,i (e !i$( %u$(

%"!e (a- (e *""!.


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I-$!eased $"ss ", VAT ad%i-is!ai"- as a di,,e!e-iaed !ae s!u$u!e !i-+s

/i( i *!"le%s ", deli-eai-+ *!"du$s a-d i-e!*!ei-+ (e !ules "- /(i$( !ae " use.

si+-i,i$a-l' i-$!eased $"ss ", ax $"%*lia-$e ,"! s%all ,i!%s0 /(i$( a!e usuall'

u-ale " ee* se*a!ae !e$"!dsa$$"u-s ,"! sales ", di,,e!e-l' axed ie%s. T(is !esuls

i- (e use ", *!esu%*i)e %e("ds ", dee!%i-i-+ (e ax liaili'0 /(i$( leads "

%"!e di,,i$ulies i- %"-i"!i-+ (e $"%*lia-$e. T(e (i+(e! $"%*lia-$e $"s !esula- ,!"%

di,,e!e-iai"- ", VAT !aes %a' als" e !e+!essi)e /i( !es*e$ " i-$"%e si-$e s%alle! ,i!%s

/i( l"/e! i-$"%e e-d " ea! *!"*"!i"-ael' %"!e ", (e u!de- (a- d" la!+e! ,i!%s.

Exe%*i"-s !e,e! " siuai"-s /(e!e "u*u is -" axed u axes *aid "- i-*us a!e -"

!e$")e!ale. T(e !ai"-ale e(i-d exe%*i"-s is " !edu$e -e+ai)e dis!iui"-al e,,e$s ",

ax (!"u+( (e e,,e$ "- i-$"%es. T(e e,,e$s ", exe%*i"- %a' e as ,"ll"/s

,alli-+ ", !e)e-ues 4 exe%*i"-s !ea (e VAT $(ai-. I, exe%*i"-s a!e +!a-ed a

*!i"! " (e ,i-al sale0 i !esuls i- a l"ss ", !e)e-ue si-$e )alue added a (e ,i-al sa+e

es$a*es ax.

U-#!e$")e!ed axai"- ", s"%e i-e!%ediae +""ds %a' lead " *!"du$e!s susiui-+

a/a' ,!"% su$( i-*us (us dis"!i-+ (e i-*u $("i$es ", (e said *!"du$e!s.

Exe%*i"-s %a' $!eae i-$e-i)es " sel, su**l' i.e. ax a)"ida-$e ' )e!i$al

i-e+!ai"-.

Exe%*i"-s e-d " ,eed "- ea$( "(e! +i)i-+ !ise " a *(e-"%e-"- $alled exe%*i"-

$!ee*. T(is a!ises ,!"% (e ,a$ (a ea$( exe%*i"- +i)es !ise " *!essu!es "- ,u!(e!


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"EAT2RES O" VAT

7. Rae ", Tax VAT *!"*"ses " i%*"se /" '*es ", !ae ", ax %ai-l'

a. < "- de$la!ed +""ds "! (e +""ds $"%%"-l' used.

. 78#79< "- +""ds $alled Re)e-ue Neu!al Raes RNR. T(e!e /"uld e -"

,all i- su$( !e%ai-i-+ +""ds.

$. T/" s*e$ial !aes /ill e i%*"sed## 7< "- sil)e! "! +"ld a-d 98< "- li3u"!.

Tax "- *e!"l0 diesel "! a)iai"- u!i-e ,uel a!e *!"*"sed " e e* "u ,!"%

(e VAT s'se% as (e' /"uld e $"-i-ued " e axed0 as *!ese-l'

a**li$ale ' (e CST A$.

9. U-i,"!% Raes i- (e VAT s'se%0 $e!ai- $"%%"diies a!e exe%*ed ,!"% ax. T(e

axale $"%%"diies a!e lised i- (e !es*e$i)e s$(edule /i( (e !aes. VAT *!"*"ses

" ee* (ese !aes u-i,"!% i- all (e saes s" (e +""ds s"ld "! *u!$(ased a$!"ss (e

$"u-!' /"uld su,,e! (e sa%e ax !ae. Dis$!ei"- (as ee- +i)e- " (e saes /(e- i

$"%es " ,i-ali6i-+ (e RNR al"-+ /i( (e !es!i$i"-s. T(is !ae %us -" e less

(a- 78


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ax0 *!e)i"usl' *aid "- (e sale ", +""ds0 /"uld e ,ull' ad:used. I /ill e lie

le)'i-+ ax "- +""ds0 s"ld i- (e las sae "! a !eail sa+e.

:.ATS T.E +#11EST A0VANTA1EI

T(e i++es e-e,i ", VAT is (a i $"uld u-ie I-dia i-" a la!+e $"%%"- %a!e. T(is /ill

!a-slae " ee! usi-ess *"li$'. C"%*a-ies $a- sa! "*i%i6i-+ *u!el' "- l"+isi$s ", (ei!

"*e!ai"-s0 a-d -" "- ased "- ax#%i-i%i6ai"-. L"!!ies -eed -" /ai a $(e$#*"i-s ,"!

da's (e' $a- 6""% d"/- (e (i+(/a's " (ei! desi-ai"-s. Redu$ed !a-si i%es a-d

l"/e! i-)e-"!' le)els /ill ""s $"!*"!ae ea!-i-+s. F"ll"/i-+ a!e (e s"%e %"!e ad)a-a+e

", VAT #

7. Simplifi4ationU-de! (e CST A$0 (e!e a!e = '*es ", ax !aes# 7


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. Tran. MinimiKe te 0i


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T(e "%a' Sales Tax A$0 7; i-!"du$ed i- 7; u-de!/e- %a-' $(a-+es (e!ea,e! a-d

i- Jul' 7=70 ,i!s *"i- ax /as i-!"du$ed /(e!ei- +""ds /e!e $lassi,ied i-" (!ee %ai-

s$(edules0 !"adl' $")e!i-+ ax ,!ee +""ds0 i-e!%ediae *!"du$s a-d ,i-is(ed +""ds. T(e

ST A$ /as !e*ealed a-d Ma(a!as(!a Value Added Tax A$0 9889 $a%e i-" ,"!$e /.e.,. 7s

A*!il0 988; " us(e! i- (e *!"+!essi)e )alue added ax s'se% i- *la$e ", (e "ld sales ax

s'se%.

VAT is a *!"+!essi)e a-d !a-s*a!e- s'se% ", axai"- /(i$( eli%i-aes (e $as$adi-+

i%*a$ ", %uli*le axai"- (!"u+( a %uli*"i- axai"- a-d se#",, *!i-$i*le. I *!"%"es

!a-s*a!e-$'0 $"%*lia-$e a-d e3ui' a-d (e!e,"!e0 is "( deale! ,!ie-dl' a-d $"-su%e!

,!ie-dl'.

VAT ei-+ a %uli *"i- ax0 e-)isa+es a- i-$!ease i- (e -u%e! ", deale!s a-d is ased "-

(e $"-$e* ", sel,#assess%e- a-d sel,#$"%*lia-$e. I is (e!e,"!e0 i-e)iale (a (e Sales

Tax De*a!%e- !a-s,"!%s isel, i-" a deale! ,!ie-dl'0 ,"$used a-d d'-a%i$ de*a!%e- "

$ae! " (e e)e! i-$!easi-+ ex*e$ai"-s ", "( (e G")e!-%e- a-d (e T!ade & I-dus!'.

Sales Tax De*a!%e- (as ae- u* (e $(alle-+e " !a-s,"!% (ei! sel)es a-d e a)ailale

,"! assisi-+ (e deale!s i- $"%*l'i-+ /i( (e *!")isi"-s ", (e la/. T(e' a!e i- (e *!"$ess

", i-salli-+ a sae#/ide -e/"!ed IT s'se% " $"%*ue!ise e-i!e ax ad%i-is!ai"- a-d("*e " *!")ide "-li-e se!)i$e " (e deale!s i- due $"u!se. T(e' a!e als" !eali+-i-+ (ei!

"!+a-isai"-al s!u$u!e " %ee (e $(alle-+es ", (e -e/ s'se% a-d sae("lde!s

ex*e$ai"-s.

Part' - #ntrodu4tion

+a4?3round

Ma(a!as(!a is "-e ", (e 97 Saes /(i$( (a)e i-!"du$ed (e Value Added Tax VAT

s'se% ", axai"- ,!"% 7s A*!il 988;. 2i( (e i-!"du$i"- ", VAT0 (e Sales Tax

De*a!%e- (as %")ed " a +l"all' !e$"+-i6ed sales axai"- s'se% (a (as ee- ad"*ed

' %"!e (a- 78 $"u-!ies.


16/53

T(e desi+- ", Ma(a!as(!a Sae VAT is +e-e!all' +uided ' (e es i-e!-ai"-al *!a$i$es

/i( !e+a!d " le+al ,!a%e/"!0 as /ell as "*e!ai-+ *!"$edu!es. A-"(e! e' ,a$"! i-

*!e*a!ai"- ", (e desi+- ", Sae le)el VAT is (e -ai"-al $"-se-sus "- $e!ai- issues. T(e

$"-se-sus (as ee- a!!i)ed a (!"u+( (e dis$ussi"-s i- (e E%*"/e!ed C"%%iee ", Sae

Fi-a-$e Mi-ise!s "- i%*le%e-ai"- ", Sae le)el VAT.

O- 7s A*!il 988;0 VAT !e*la$ed (e si-+le *"i- sales ax. Si-+le *"i- sales ax (ad a

-u%e! ", disad)a-a+es0 *!i%a!il' (a ", d"ule axai"-. VAT is a %"de!- a-d *!"+!essi)e

axai"- s'se% (a a)"ids d"ule axai"-. I- addii"- " ",,e!i-+ (e *"ssiili' ", a se#",,

", ax *aid "- *u!$(ases0 VAT (as "(e! ad)a-a+es ,"! "( usi-ess a-d +")e!-%e-.

I eli%i-aes $as$adi-+ i%*a$ ", d"ule axai"- a-d *!"%"es e$"-"%i$ e,,i$ie-$'.

I is *!i%a!il' a sel,#*"li$i-+0 sel,#assess%e- s'se% /i( %"!e !us *u "- deale!s.

I *!")ides (e *"e-ial ,"! a s!"-+e! %a-u,a$u!i-+ ase a-d %"!e $"%*eii)e

ex*"! *!i$i-+.

I is i-)"i$e ased0 a-d as a !esul i ",,e!s a ee! ,i-a-$ial s'se% /i( less s$"*e ,"!

e!!"!.

I (as a- i%*!")ed $"-!"l0 %e$(a-is% !esuli-+ i- ee! $"%*lia-$e.

I /ide-s (e0 ax ase a-d *!"%"es e3ui'.

VAT i- Ma(a!as(!a is le)ied u-de! a le+islai"- -"/- as (e Ma(a!as(!a Value Added Tax

A$ MVAT A$0 su**"!ed ' Ma(a!as(!a Value Added Tax Rules MVAT Rules. VAT is

le)ied "- sale ", +""ds i-$ludi-+ i-a-+ile +""ds.

Te meanin3 of 3ood


17/53

Te meanin3 of


18/53

Part % - Re3i


19/53

Effe4tie date of re3i


20/53

I, a deale! l"ses (is (e! $e!i,i$ae ", !e+is!ai"- "! ("l"+!a%0 "! i is a$$ide-all' des!"'ed

"! de,a$ed0 (e- (e' %a' "ai- a du*li$ae $"*' ", (e $e!i,i$ae ", ("l"+!a% ,!"% (ei!

sales ax ",,i$e.

T(e $e!i,i$ae ", !e+is!ai"- a-d ("l"+!a% is *e!s"-al " (e deale! " /("% i is issued a-d

is -"-#!a-s,e!ale.

Can3e< to bu


21/53

I, a deale!

dis$"-i-ue (e usi-ess

dis*"se ", "! sell "! !a-s,e! (e usi-ess

A deale! %us i-,"!% (e Sales Tax De*a!%e- /i(i- 8 da's ", (e e)e-. I- $ase ",

dis*"sal "! sale ", usi-ess0 (ei! su$$ess"! /ill -eed " a**l' ,"! a ,!es( !e+is!ai"-

$e!i,i$ae.

F"! $a-$ellai"- ", !e+is!ai"- a deale! s("uld su%i form '&F/(i$( is a)ailale /i( (e

l"$al sales ax ",,i$e. I $a- als" e d"/-l"aded ,!"% (e /esie

BBBatmaara


22/53

Te obli3ation< of a re3i


23/53

EDample

T(e ,"ll"/i-+ exa%*le s("/s ("/ (e VAT /"!s (!"u+( (e $(ai- ,!"% %a-u,a$u!e! "

!eaile!.

Compan= Au's i!"- "!e a-d "(e! $"-su%ales a-d %a-u,a$u!es sai-less seel ue-sils

Partner


24/53

Parti4ular< Amount

9R 9R&&&

Partner0988

u $a- $lai% se ",, ", ax *aid "- *u!$(ases 0888

Net VAT amount to pa= Bit te Return '%&&

Sop?eeper C

1u!$(ases *"lis(ed sai-less seel ue-sils 70=80888

1a$i-+ %ae!ial ;0888

T"al 1u!$(ases 70=;0888

Sales 909;0888

Value added >&8&&&

S("*ee*e! C is liale " *a' V AT "- Rs.909;0888 P < 0888

Se ",, ", ax *aid "- *u!$(ases R


25/53

T(e sale a-d *u!$(ase ,i+u!es s("/- i- (e exa%*le a!e ex$ludi-+ ax

T(e Sae G")e!-%e- !e$ei)ed (e ax i- sa+es. T(e *a'%e-s ", ax /e!e as ,"ll"/s

Parti4ular< Amount 9R


26/53

Ce!ai- deale!s %a' ,i-d i di,,i$ul " ee* deailed !e$"!ds ,"! $lai%i-+ se#",,. F"! su$(

deale!s0 a si%*le! a-d "*i"-al %e("d ", a$$"u-i-+ ,"! VAT (as ee- i-!"du$ed. T(is

%e("d is (e $"%*"sii"- s$(e%e. I %a' e -"ed (a $"%*"sii"- s$(e%e is -" %ea- "

e a ax $"-$essi"- s$(e%e u "-l' a si%*li,i$ai"- ", ax $al$ulai"- a-d *a'%e- s'se%.

TaD pa=able b= dealer< optin3 for 4ompo


27/53

Cal4ulatin3 turnoer of


28/53

VAT a**lies "-l' " (e sale ", +""ds. Su**l' ", se!)i$es is -" liale " VAT. 2"!s

$"-!a$s a!e dee%ed sales /(e!e "(0 +""ds a-d se!)i$es a!e *!")ided i- a !a-sa$i"- a-d

$a--" e se*a!aed.

A /"!s $"-!a$ %a' i-)"l)e (e $!eai"- ", i%%")eale *!"*e!'0 e.+. a ("use0 a ,a$"!' "!

a !id+e. S"%e "(e! exa%*les ", /"!s $"-!a$s a!e *(""+!a*('0 !e*ai!s & %ai-e-a-$e

e$.

T" $al$ulae (e a%"u- a deale! s("uld i-$lude i i- (ei! u!-")e! ", sales0 s" (a (e' %a'

dedu$ i ,!"% (e "al $"-!a$ *!i$e0 (e

$"ss ", la"u! a-d se!)i$e $(a!+es.

a%"u- *aid " su#$"-!a$"!s.

$(a!+es ,"! *la--i-+ a-d desi+-i-+0 a-d a-' a!$(ie$s ,ees.

(i!i-+ $(a!+es ,"! %a$(i-e!' a-d ""ls. $"s ", $"-su%ales0 su$( as0 /ae!0 +as a-d ele$!i$i'.

Deale!5s ad%i-is!ai)e $"ss !elai-+ " la"u! a-d se!)i$es a-d a-' "(e! si%ila!

ex*e-ses.

a-' *!",i ele%e- (a !elaes " (e su**l' ", la"u! a-d se!)i$es.

Ale!-ai)el'0 i- lieu ", (e dedu$i"-s as a")e0 a deale! %a' $(""se " dis$(a!+e (e

liaili' a!isi-+ "- /"!s $"-!a$s ' !e,e!!i-+ " (e ale *!es$!ied i- (e !ules.

I, (e deale! ,i-ds (a i is "" $"%*li$aed " $al$ulae (e dedu$i"-s0 (e- (e' %a' "* ,"!a $"%*"sii"- s$(e%e ,"! a-' /"!s $"-!a$.

Sale< and pur4a


29/53

I, (e (i!e#*u!$(ase a+!ee%e- s*e$i,ies (e i-e!es $"%*"-e- (e- i- $al$ulai-+ (e sales

*!i$e0 deale! s("uld dis!e+a!d (e i-e!es $"%*"-e- i-$luded i- (e a+!ee%e-.

Cal4ulatin3 te amount of VAT due on


30/53

T(is is (e -ex sa+e ", ax $al$ulai"-. A (is sa+e VAT is $(a!+ed "- "al *u!$(ases.

Deale! %us0 ("/e)e!0 %ae s"%e ad:us%e-s " (is a%"u- ,"!0 i- $e!ai- $ases0 (e ,ull se

",, ", (e VAT *aid "- *u!$(ases is -" a)ailale.

Ad@u


31/53

ad:us%e-. E,,e$i)el' (is %ea-s (a0 i, a deale! sells a >;< ", (e MR1 (e- (e'

$a- $lai% se ",, "-l' " (e exe- ", >;< ", (e ax *aid.

A deale! $a- -" $lai% a-' se ",, ,"! (e ax *aid "- a-' *u!$(ases (a !e%ai- u-s"ld

"- (e dae /(e- usi-ess dis$"-i-ues.

All (is i-,"!%ai"- s("uld e a)ailale ,!"% (ei! !e$"!ds0 i-$ludi-+ ax i-)"i$es a-d ills "!

$as( %e%"!a-du% (e' (a)e issued0 a-d (e ax i-)"i$es (e' (a)e !e$ei)ed.

Part ( - "ilin3 a return and pa=in3 te taD

VAT is a sel,#assess%e- s'se% a-d deale!5s a!e ex*e$ed " %ae sel, assess%e- ,"! a

+i)e- ax *e!i"d a-d de$la!e (ei! VAT liaili' ' ,ili-+ !eu!-s. T(e !eu!-s (a)e " e ,iled

i- (e *!es$!ied ,"!% a-d ' (e s*e$i,ied daes. Fu!(e!0 (e' a!e als" !e3ui!ed " *a' (eax due as *e! (e !eu!- ,iled.

I- Ma(a!as(!a0 !eu!- ,"!% is !eu!-#$u%#$(ala-. As su$(0 ,ili-+ ", !eu!-s al"-+#/i(

*a'%e- ", ax "- "! e,"!e (e due dae a (e -"i,ied a- /"uld e $"-side!ed as

su,,i$ie- $"%*lia-$e. H"/e)e!0 /(e!e a-' a%"u- ", ax i-$ludi-+ i-e!es "! *e-al' is due

as *e! a ,!es( "! !e)ised !eu!-0 (e- (e' s("uld ,i!s *a' su$( a%"u- i- G")e!-%e-

T!easu!' a-d ,ile (e !eu!- i- (e l"$al ",,i$e ", Sales Tax De*a!%e- al"-+ /i( a sel,

aesed $"*' ", (e $(ala-. I, -" *a'%e- is due "! a !e,u-d is $lai%ed as *e! (e !eu!-0 (e'

a!e als" !e3ui!ed " ,ile (e !eu!- i- (e l"$al ",,i$e ", (e Sales Tax De*a!%e-.

Return form8 Audi !e*"! u-de! se$i"- 7 ", (e Ma(a!as(!a Value Added TaxA$0 9889.

0#""ERANCE +ET:EEN M-VAT AN0 CENVAT

L2#C5 "6AS. +AC5

M-VAT

Sales ax /as ,i!s i-!"du$ed i- I-dia i- (e (e- "%a' 1!")i-$e as ea!l' as Mar4 'HFQ

/(e!e a ax /as i%*"sed "- sale ", "a$$" /i(i- $e!ai- u!a- a-d suu!a- a!eas. I- (e


43/53

=ear 'H>)0 a +e-e!al sales ax /as i-!"du$ed le)'i-+ sales ax a (e las sa+e ", sale ",

+""ds.

T(e "%a' Sales Tax A$0 7; i-!"du$ed i- 7; u-de!/e- %a-' $(a-+es (e!ea,e! a-d

i- Jul' 7=70 ,i!s *"i- ax /as i-!"du$ed /(e!ei- +""ds /e!e $lassi,ied i-" (!ee %ai-

s$(edules0 !"adl' $")e!i-+ ax ,!ee +""ds0 i-e!%ediae *!"du$s a-d ,i-is(ed +""ds. T(e

ST A$ /as !e*ealed a-d Ma(a!as(!a Value Added TaD A4t8 %&&%$a%e i-" ,"!$e. '


44/53

e dee!%i-ed /i( !e,e!e-$e " (e "*i"- exe!$ised ' (e deale! ,"! dis$(a!+i-+ ax

liaili'.

+u> saes (a u-less "(e!/ise ex*!essl'

*!")ided "! u-less $"-ex "(e!/ise !e3ui!es 0 !e,e!e-$es " (e ex*!essi"-s du' du' ",

ex$ise a-d duies ", ex$ise s(all e $"-s!ued " i-$lude a !e,e!e-$e " Ce-!al Value

Added Tax 9CENVAT;

Se4tion FG 9Dia Di4; of CEA 3ie< poBer to te 4entral 3ot to ma?e rule< to

a 1!")ide ,"! $!edi ", du' *aid "! dee%ed " (a)e ee- *aid "- +""ds used i- "! i-

!elai"- " %a-u,a$u!e ", ex$isale +""ds .

1!")ide ,"! +i)i-+ su%s ", %"-e' /i( !es*e$ " !a/ %ae!ials used i- %a-u,a$u!e ",

ex$isale +""ds.

$ 1!")ide ,"! $!edi ", se!)i$e ax *aid "! *a'ale "- axale se!)i$es used i- 0 "! i- !elai"-

" 0 (e %a-u,a$u!e ", ex$isale +""ds.


45/53

I- exe!$ise ", (ese *"/e!s0 (e $e-!al +"). %ade Cenat Credit Rule< 8 %&&> 0 /(i$(

+")e!-s (e CENVAT s$(e%e.

6EA16E PROV#S#ONS

M-VAT

Re3i


46/53

Issue ax i-)"i$es a-d0 e $"%*eii)e.

Effe4tie date of re3i


47/53

I, a deale! (as %"!e (a- "-e *la$e ", usi-ess0 (e- Sales Tax O,,i$e /ill *!")ide (e%0

u*"- (ei! !e3ues0 "-e $"*' ", (e $e!i,i$ae ", !e+is!ai"- a-d ("l"+!a% ,"! ea$( addii"-al

*la$e ", usi-ess.

I, a deale! l"ses (is (e! $e!i,i$ae ", !e+is!ai"- "! ("l"+!a%0 "! i is a$$ide-all' des!"'ed

"! de,a$ed0 (e- (e' %a' "ai- a du*li$ae $"*' ", (e $e!i,i$ae ", ("l"+!a% ,!"% (ei!

sales ax ",,i$e.

T(e $e!i,i$ae ", !e+is!ai"- a-d ("l"+!a% is *e!s"-al " (e deale! " /("% i is issued a-d

is -"-#!a-s,e!ale.

Can3e< to bu


48/53

I, a deale!

dis$"-i-ue (e usi-ess

dis*"se ", "! sell "! !a-s,e! (e usi-ess

A deale! %us i-,"!% (e Sales Tax De*a!%e- /i(i- 8 da's ", (e e)e-. I- $ase ",

dis*"sal "! sale ", usi-ess0 (ei! su$$ess"! /ill -eed " a**l' ,"! a ,!es( !e+is!ai"-

$e!i,i$ae.

F"! $a-$ellai"- ", !e+is!ai"- a deale! s("uld su%i form '&F/(i$( is a)ailale /i( (e

l"$al sales ax ",,i$e. I $a- als" e d"/-l"aded ,!"% (e /esie

BBBatmaara


49/53

exe-d $"#"*e!ai"- " (e ",,i$e!s ", (e Sales Tax De*a!%e- a deale!5s usi-ess

*!e%ises a-d *!")ide all assisa-$e " (e% " dis$(a!+e (ei! duies.

CENVAT

6e3al proi; 0 "! a-' "(e! la/ ,"! (e

i%e ei-+ i- ,"!$e0 (e )alue ", (e i%*"!ed +""ds a-d ex*"! +""ds s(all e (e !a-sa$i"-

)alue ", su$( +""ds0 (a is " sa'0 (e *!i$e a$uall' *aid "! *a'ale ,"! (e +""ds /(e- s"ld

,"! ex*"! " I-dia ,"! deli)e!' a (e i%e a-d *la$e ", i%*"!ai"- "! as (e $ase %a' e 0 ,"!

ex*"! ,!"% I-dia ,"! deli)e!' a (e i%e a-d *la$e ", ex*"!ai"-0 /(e!e (e u'e! a-d selle!

", +""ds a!e -" !elaed a-d *!i$e is (e s"le $"-side!ai"- ,"! (e sale su:e$ " $"-dii"-s

as %a' e s*e$i,ied i- (e !ules %ade i- (is e(al,

1!")ided (a su$( !a-sa$i"- )alue s(all i-$lude0 i- addii"- " (e *!i$e0 a-' a%"u- *aid

"! *a'ale ,"! $"ss a-d se!)i$es0 i-$ludi-+ $"%%issi"-s a-d !"e!a+e0 e-+i-ee!i-+0 desi+-

/"!0 !"'alies a-d li$e-se ,ees0 $"ss ", !a-s*"!ai"- " (e *la$e ", i%*"!ai"-0 i-su!a-$e0

l"adi-+0 u-l"adi-+ a-d (a-dli-+ $(a!+es " (e exe- a-d i- (e %a--e! s*e$i,ied i- (e !ules

i- (is e(al, 1!")ided ,u!(e! (a (e !ules i- (is e(al, %a' *!")ide ,"!

T(e $i!$u%sa-$es i- /(i$( (e u'e! a-d selle! a!e dee%ed " e !elaed T(e %a--e! ",

dee!%i-ai"- ", )alue /(e- (e!e is -" sale "! (e u'e! a-d selle! a!e !elaed "! *!i$e is -"

(e s"le $"-side!ai"- ,"! sale "! i- a-' "(e! $ase0 (e %a--e! a-d a$$e*a-$e "! !e:e$i"- ",


50/53

)alue de$la!ed ' (e i%*"!e! "! ex*"!e!0 /(e!e (e *!"*e! ",,i$e! (as !eas"- " d"u (e

!u( a-d a$$u!a$' ", su$( )alue0 a-d dee!%i-ai"- ", )alue ,"! (e *u!*"se ", (is se$i"-.

1!")ided als" (a su$( *!i$e s(all e $al$ulaed /i( !e,e!e-$e " (e !ae ", ex$(a-+es as i-

,"!$e "- (e dae "- /(i$( a ill ", e-!' is *!ese-ed u-de! se$i"- 0 "! a s(i**i-+ ill "!

ill ", ex*"!0 as (e $ase %a' e0 is *!ese-ed u-de! se$i"- ;8

Ex*la-ai"- # F"! (e *u!*"ses ", (is se$i"-#a Q!ae ", ex$(a-+eQ %ea-s (e !ae ",

ex$(a-+e#i dee!%i-ed ' (e "a!d 0 "!ii as$e!ai-ed i- su$( %a--e! as (e "a!d %a'

di!e$0 ,"! (e $"-)e!si"- ", I-dia- $u!!e-$' i-" ,"!ei+- $u!!e-$' ", ,"!ei+- $u!!e-$' i-"

I-dia- $u!!e-$' ,"!ei+- $u!!e-$'Q a-d QI-dia- $u!!e-$'Q (a)e (e %ea-i-+s !es*e$i)el'

assi+-ed " (e% i- (e F"!ei+- Ex$(a-+e Ma-a+e%e- A$0 7 .

T(e Cus"%s Valuai"- Dee!%i-ai"- ", 1!i$e ", I%*"!ed G""ds Rules0 7== la's d"/-

(e %e("ds ", )aluai"- ased "- (e ACV. T!a-sa$i"- )alue0 /(i$( is (e *!i$e *aid "!

*a'ale ,"! (e i%*"!ed +""ds0 is (e *!i%a!' asis ,"! )aluai"-. I, (e !a-sa$i"- )alue

%e("d is -" a**li$ale i- a s*e$i,i$ $ase0 (e "(e! %e("ds ", )aluai"- *!es$!ied i- (e

Rules ased "- ACV (a)e " e ,"ll"/ed i- a (ie!a!$(i$al "!de!0 su:e$ " $e!ai-

ex$e*i"-s . U-de! (e Cus"%s A$0 790 (e Ce-!al G")e!-%e- (as als" ee- e%*"/e!ed

" ,ix Ta!i,, Values u-de! *!")isi"-s ", Se$i"- 79 ,"! a-' *!"du$. I, Ta!i,, Value is ,ixed

,"! a-' +""ds0 (e- ad#)al"!e% duies a!e " e $al$ulaed /i( !e,e!e-$e " su$( Ta!i,, Value.

T(e a!i,, )alues %a' e ,ixed ,"! a-' $lass ", i%*"!ed "! ex*"! +""ds (a)i-+ !e+a!d " (e

!e-d ", )alue ", su$( "! lie +""ds a-d (e sa%e (as " e -"i,ied i- (e ",,i$ial +a6ee.

T(is %easu!e is !es"!ed " "-l' i- !a!e $ases /(e!e (e *!i$e ,lu$uai"-s i- (e %a!e a!e

!a%*a- (a)i-+ si+-i,i$a- e$"-"%i$ i%*a$.

T(e Cus"%s Valuai"- Rules0 7==0 la's d"/- %e("ds ,"! (e )aluai"- ", i%*"!ed +""ds.

T(e *!i%a!' asis ,"! )aluai"- is (e QT!a-sa$i"- ValueQ. I- $e!ai- siuai"-s0 (e Cus"%s

au("!iies $"uld !e:e$ (e de$la!ed )alue !a-sa$i"- )alue %e("d0 i, (e !u( "! a$$u!a$'

", (e de$la!ai"- is !eas"-al' sus*e$ed. I- all su$( $ases /(e!e (e !a-sa$i"- )alue%e("d is -" a**lied0 +""ds s(all e )alued ' a**l'i-+ (e suse3ue- %e("ds i- a s!i$l'

(ie!a!$(i$al. I- "!de! " e-ale (e Cus"%s " dee!%i-e (e )alue ' a**li$ai"- ", (e

%"s a**!"*!iae %e("d0 (e i%*"!e! is !e3ui!ed " !u(,ull' de$la!e (e ,ull *a!i$ula!s

$"-$e!-i-+ (e +""ds u-de! i%*"!. T(ese i-$lude ,ull des$!i*i"- a-d s*e$i,i$ai"-s ", (e

+""ds0 asis ", )aluai"- a**lied0 !elai"-s(i* /i( (e su**lie!0 $"-dii"-s a-d !es!i$i"-s i,

a-' aa$(ed /i( (e sale0 ele%e-s ", $"s -" i-$luded i- (e i-)"i$e *!i$e0 !"'al' a-d

li$e-se ,ee *a'ale i- !elai"- " (e i%*"!ed +""ds0 e$. T(ese deails a!e " e de$la!ed i-

a s*e$ial Valuai"- De$la!ai"- F"!%a desi+-ed ,"! (e *u!*"se.


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Tran


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T(e ax *a'ale "- sales is " e $al$ulaed "- (e selli-+ *!i$e. T(e ax *aid "- *u!$(ases

su**"!ed ' a0 )alid ax i-)"i$e is +e-e!all' a)ailale as se#",, i-*u0 ax $!edi /(ile

dis$(a!+i-+ (e ax liaili' "- sales.

EDample

T(e ,"ll"/i-+ exa%*le s("/s ("/ (e VAT /"!s (!"u+( (e $(ai- ,!"% %a-u,a$u!e! "

!eaile!.

Compan= Au's i!"- "!e a-d "(e! $"-su%ales a-d %a-u,a$u!es sai-less seel ue-sils

Partner


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+iblio3rap=

' Value Added TaD += Sale< TaD 0epartment

% BBB3oo3le4om

F BBBtaD>india4enat4om

> BBBatmaara

MCOM PART 2 PROJECT OF MVAT CEN VAT.docx

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