Liability of vat - consignment sale

[Guest]

A is a direct seller as well as sells goods on consignment is consignment sales to be included as total sales in A's books of accounts and is it liable for vat, and is it to be considered as turnover for purpose of tax audit under income tax

[Subhash Majumdar]

yes this should be considered as turnover for the purpose of tax audit under the income tax actu/s. 44(AB) because consignment nature of purchase & sales is also part of trading and this traiding may be raised profit or loss but separate trading account for consignment should be prepare & part of profit or loss on consignment will be shown on Profit & Loss Account Credit side. Due to reason if the organisation face loss on other business then such loss can be set off from profit on consignment. As well as this is liable for VAT because there is no provision under the VAT Act. that consignment sale will not be treated as turnover, but if the goods are declared by Govt. as Declare goods in their Notification then consignment sale will not be treated as Turnover under the VAT Act.

[Guest]

I have a little confusion regarding VAT charged on consignment sales  suppose we are sending the goods on consignment basis to other state in FORM 'F' then we are not required to pay CST n is VAT chargeable, If then provide me with reasons.

AI Summary

VAT Liability on Consignment Sales: Should They Be Included in Turnover for Tax Audits Under Income Tax Act? A discussion on the liability of VAT for consignment sales raises questions about whether such sales should be included in total sales for accounting and tax audit purposes. One participant asserts that consignment sales should be considered part of turnover for tax audits under the Income Tax Act, as they contribute to trading profits or losses. It is also stated that consignment sales are liable for VAT unless specified otherwise by government notifications. Another participant expresses confusion about VAT applicability when goods are sent on consignment to another state using FORM 'F', questioning the requirement to pay CST in such cases.