which tax is levied

[Roshan Begrajka]

Hi all,

One of my client, Mr x (Registered dealer) doing business of Readymade garments in Jharkhand purchasing goods from Mr Y of West Bengal readymade manufacturer (not a registered dealer). when Mr x sells goods to any other person charges VAT @ 5% on such goods and paid to the Govt. My query is

1) Is there any tax levied on Purchase? if any then which tax and what is the procedure

2) where we have to show in VAT return 1) purchase from unregistered dealer or 2) Any other rows.

Please reply and suggest, its urgent.

Thanks in advance

[YAGAY andSUN]

Dear Roshan,

Purchase Tax is applicable where goods are purchased without payment of duty and disposed off other than by way of sales. In your case, goods are being procured without payment of vat (procured from unregistered dealer) but at the time of sale, VAT is being charged. Therefore, in our view you are not liable to pay the purchase tax in Jharkhand.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Roshan Begrajka]

ok thnx but the same amount of puchase is shown in purchase from unregistered dealer or in Inter state purchase. pls reply

[Guest]

purchases should be shown as inter state purchase in vat return.

[Roshan Begrajka]

Then they will ask entry tax etc

AI Summary

Purchase tax applicability clarified: purchase tax not triggered where VAT is charged on resale; report as interstate purchase. Purchase tax applies where goods are procured without payment of tax and disposed otherwise than by sale; because the dealer subsequently charges VAT on resale, purchase tax principles do not impose an additional levy. Procurements from the unregistered West Bengal manufacturer should be shown as interstate purchases in the VAT return, while separately monitoring potential entry tax obligations under local law.