Should I have to pay tax

[Tax mgmt]

Hi,

I am a trader in Tamil Nadu. I bought some products without bill and sold it with bill mentioning the tax amount, since the buyer insisted me to give a bill. The tax amount in the bill is around 6000 and my profit is only 1500. Should I have to pay the VAT amount to the government? Please advise.

[DR.MARIAPPAN GOVINDARAJAN]

In the bill issued by you shall contain the gross value of the goods, applicable VAT rate and amount. On issue of the bill, the VAT shall be paid to the credit of the department within the period specified. You have to take registration with the Department also.

[Tax mgmt]

Dear Mr. MARIAPPAN GOVINDARAJAN,

Thank you so much for your response. In the bill I have mentioned ₹ 6000 as VAT. So if I understand, I have to pay this 6000 to the CTO. You mean sales tax department as the credit department. Am I right?

[DR.MARIAPPAN GOVINDARAJAN]

Yes, you are correct.

AI Summary

VAT liability arises when VAT is stated on a tax invoice; the seller must remit the tax and register accordingly.
Issuing a bill that states gross value, applicable VAT rate and VAT amount creates a VAT liability; the seller must remit the VAT to the department within the prescribed period and must obtain registration with the tax department.