VAT on Transported Sand

[Asked by Guest]

Dear Sir,

We are a sand supplier. We purchase sand from mines and supply end to end users i.e. builders, etc. During the purchase we take Royalty Receipts. Those Royalty Receipts are in the name of end users. In principle we are not purchasing sand we are only transporting sand. Whether VAT is applicable to us ?.Or is there some other tax we should be paying.

[YAGAY and SUN]

Dear Vaibhav,

In 2015-2016 MP Budget, the VAT on Sand, Gitti etc. had been increased. Vat on sand, gitti and flooring stone increased - sand, gitti from ₹ 20 to 35 per cubic meter, flooring stone ₹ 1/ 50 paise/ 25 paise to ₹ 2.50 / ₹ 1.50 / 75 paise.

For details please click on following link.

http://www.capitalmarket.com/Budget/2015-2016/Madhya%20Pradesh%20Budget%20Press%20Release%202015-16.pdf

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[Ganeshan Kalyani]

To my understanding you are liable to pay Vat as the activity is of trading of purchasing sand from mines and supplying it to end users.

AI Summary

VAT on sand: transporters who purchase and supply sand are treated as traders and liable for VAT.
Whether VAT applies depends on characterising the activity: transporting sand while purchasing from mines and supplying end users is treated as trading and attracts VAT liability. A respondent also notes a budgetary increase in prescribed VAT charges for sand, gitti and flooring stone, and advises treating the transactions as taxable supplies subject to the applicable indirect tax provisions.