Deducting VAT and adding GST......
I may have missed it but would appreciate illustration on this point.
Shopkeepers these days simply add GST on the prices that were either MRP or printed otherwise on the packing. I presume these prices already included VAT and other cesses.
As a matter of fact, VAT plus cesses should be deducted before applying GST.
My question: Was VAT a constant percentage on all items or was VAT also different for different products?
Would appreciate comments. more
Shopkeepers these days simply add GST on the prices that were either MRP or printed otherwise on the packing. I presume these prices already included VAT and other cesses.
As a matter of fact, VAT plus cesses should be deducted before applying GST.
My question: Was VAT a constant percentage on all items or was VAT also different for different products?
Would appreciate comments. more
Viewed by 698
Any branded packet manufactured until June 2017 had VAT and other taxes included in the MRP printed on the packet. The VAT was different for products and was not same across states. The retailer is supposed to charge only as per MRP (or at discounted rate) and nothing more on it. The packet manufactured from 1 July 2017 has GST included in MRP instead of VAT which was charged earlier. Most of the daily essential grocery products which are sold lose (unbranded) doesn't attract any GST these days. Now, let me come to restaurants which sell items like Idly, Vada, Dosa and so on. The restaurant charges 12% or 18% GST above the base price, based on whether restaurant is a Non-AC or Partial/Full AC resp. The catch is here. Lets say until 30 June 2017, the cost of Dosa was 40 rupees, then it had 4% or 5% VAT already included in it. The restaurant never used to show the same on the bill / receipt issued. From 1 July 2017, restaurants started charging 12% or 18% on that full amount of 40 rupees. This means customers are paying VAT + GST (both) though the bill shows only GST values (like in the breakup form as CGST and SGST). The VAT component is now pocketed by restaurant owners as additional profits. However, I have personally seen one restaurant in Mumbai who gives that 5% discount (of earlier VAT component) on published rate and then on discounted base rate charges 12% VAT. i.e. Rs. 40 - Rs. 2 = Rs. 38 + 12%GST (for Non-AC restaurant). Thus coming to your two questions, 1. Yes, ideally VAT plus cess should be deducted from MRP before charging new GST for any packet manufactured until 30 June 2017. Not for packets manufactured after 30 June 2017. 2. VAT was a state subject and was slightly different for same product across states. more
Sep 21
Dear Satya PAl At any cost the cum GST rate should not exceed MRP. The VAT of majority of the super market items are 5% more
Sep 21
If you need separate GST for claiming ITC, then the retailer has to deduct GST from the MRP and show it separately on the bill for an item with MRP. This is done by large organised retailers like DMart. But I doubt that they ask for your GSTIN and print it on the bill so that it is reported in their GSTR1. So, the GST shown on the bill would be only for information purposes. If separate GST is not required, then the retailer has to sell at or below MRP. VAT rate was varying across items and across states for the same item as it was levied at state level. GST rate also varies across items, but for the same item it is uniform across the country. Therefore, the MRP across the country will be same as long as the manufacturer does not change the basic price. more
Sep 21
If in printed price/MRP is inclusive of all taxes then no one charge any type of tax on MRP(MAXIMUM RETAIL PRICE). more
Sep 21
