Liable to VAT or not? if yes then how much %

[Guest]

I am purchasing clothes in meter from market without paying VAT and making it into a part of shirt ( semi marketable) and my turnover is more than 5 lakhs in 9 months. Am I liable to pay Vat?, if yes then how much?

[YAGAY andSUN]

Dear Faruque,

It seems that you have just touched the threshold limit. It is better to get registration and pay the tax. In your case it is 5%.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

VAT liability arises for manufactured garments from purchased fabric; registration and payment of tax are required under the applicable rate. A vendor who purchases fabric without paying VAT and converts it into semi-marketable shirt components becomes subject to VAT where the vendor's taxable turnover meets the statutory threshold; the vendor should obtain registration and remit VAT on the taxable output at the applicable rate.