Basic concepts of Vat....

1. Presentation on : Basic
Concept of VAT rules

2. Content
1) Introduction of VAT
2) Types of VAT classification
3) Purchase
4) Sales
5) Stock transfer
6) Payment collection

3. What is VAT ?
 Value add tax is a tax. Which is charged on the increase in
value of goods and services at each stage of production
and circulation.
 Example:
Purchase price Rs. 100
Tax paid during the purchase 14.5 (input tax)
Selling price 150
Tax collected during the resale 21.75
Vat payable (out put tax –input tax) 7.25
Total tax 21.75-14.5=7.25

4. Types of sales & purchase classes
 1) Value added tax (kvat 14.5%, 5.5%, )
 2) Central sales tax (cst 2%, cst 14.5% cst 5.5%)
 3) Exempted sales (SEZ) (againest I forms)
 4) High sea sales ( HSS )
 5) Service tax (12.36%)

5. Part A: purchase
 If we purchase any product within the sate then we need to pay
14.5% and 5.5% tax which is set by Karnataka Govt.
 If it is interstate purchasing, we need to pay 2% CST. by
providing C forms.
 (as we are registered dealer we are able to provide the C
forms)
 Anther most important thing is we need to provide E-sugam
form & purchase order.

7. B. Sales
 1) As on Govt regulation the sales tax within the state on
product is 14.5/5.5%,and on services 12.36%.
 If it is interstate, it would be a CST 2% for that we need to get
purchase order E-sugam, and C form.
(the Dealer should be registered TN.no. (11 digit))
In case of special eco zone:
 There is no any taxes on sales. For that the company should
make an agreement with us and they are able to provide the I-
forms,
To reduce uncertain risks(Display, projector damages etc) while
transporting the goods to the interstates, due to this you need to go
for the insurance.

8. C) Stock Transfer
It is the transfer of goods from one branch to another
branch.
If the goods are transferring from Bangalore branch to the
other state branches like Chennai, Mumbai, Hydrabad and
Pune then we need to pay 2% taxes on that.
If it is from Mumbai to blr branch 4%
From Chennai 3%

9. Losses due to credit sales
Sales
person
Credit period losses
1 months Interest rate 18%, (1
year/12 months )
1 months 2 months
A 30 00 000 =30 00 000 X 0.18 45000/- 90 000/-
B 30 00 000 =30 00 000 X 0.18 45000/- 90 000/-
C 30 00 000 =30 00 000 X 0.18 45000/- 90 000/-
D 30 00 000 =30 00 000 X 0.18 45000/- 90 000/-
-------
------
70 70 X
3000000=
21,00,00,00
0
21X0.18= 31,50,000/- 63, 00,000/-

11. By: Kalmesh S.