Purchases from Unregistered dealer in Hyderabad.

[Raju Kumawat]

A Registered dealer has made purchases from Unregistered dealer in Hyderabad in the FY 2014-15 and didn't disclose aforesaid purchases in VAT returns and didn't pay any taxes on those said purchases.

Is the Registered dealer liable to pay Taxes on said purchases?

If yes, what is the rate and when could claim input credit of the same?

Regards

[YAGAY and SUN]

Dear Raju,

If such goods are disposed off other than by way of sale in the Telangana State, then, you would have to pay the purchase tax at appropriate rate either 5% or 14.50% depending on the classification of such goods. Not showing the goods in the VAT return is an offense.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

AI Summary

Purchase tax liability for acquisitions from unregistered dealers requires payment at applicable rates and disclosure to claim input credit. Registered dealers purchasing from unregistered dealers must pay purchase tax when such goods are disposed other than by sale within the State, at the rate applicable to the goods' classification; nondisclosure in VAT returns and nonpayment of this tax is an offence, and input tax credit is claimable only after compliance with the payment and disclosure requirements.