dyeing of cloth job work

[satbir singhwahi]

Sir

cloth dyeing unit is paying vat on 60% of value of invoice.The dept is contesting that material consumed is more so pay vat on material consumed. What is the correct ?

[YAGAY andSUN]

Yes, they are correct in demanding of VAT on consumption of material for dyeing of cloth as it is treated as Deemed Sales. Please check the definition of Sales and Sale Price under Punjab VAT Act read with Rules made thereunder.

[DR.MARIAPPAN GOVINDARAJAN]

I also agree with the contentions of Yagay and Sun.

AI Summary

Deemed sales: VAT may be leviable on materials consumed in cloth dyeing job work under sales price rules. The department treats cloth dyeing job work as Deemed Sales, asserting VAT is leviable on materials consumed during dyeing by including such consumption in the Sales Price; advisers concur and refer to the statutory definitions of Sales and Sales Price under the VAT Act and rules for determining the taxable base.