Purchase tax liability u/s 12 of ovat act 2004 if bye product exmpted ,
dharmendrajoshi
(Querist) 21 February 2013
This query is : Resolved
THE DEALER PROCCESSING DAL FROPM PULSES 100KG PULSES USED FOR PROCCESING DAL &GET 76KG DAL .DAL TAXABLE @5%IN THE STATE OF ODISHA DEALER PAY TAX ON DAL BUT DEPT CHARGES TAX ON 24 KG VALUE OF PULSES PUSCHASE ON THE GROUND CHILKA EXMPTED FROM TAX.THE DEALER PAY MORE TAX THAN THE PURCHASE VALUE OF PLSES BECAUSE 76 KG DAL VALUE IS MORE THAN THE PURCHASE VALUE OF 100KG PURCHASE VALUE OF PULSES .PLEASE CLARIFICATION REGANDING THE PURCHASE TAX .
R K JAIN
(Expert) 23 February 2013
Input tax on the purchase of pulses from the state of orrisa will be allowed on proportion basis as per section 20(3)(e). Input tax will be reversed. There is no purchase tax in the case of by product is tax free. Purchase tax is applicable in the case the goods are purchased in the state where no tax is paid at the time of purchase and the goods are sold without tax. Tax calculation for proportion tax will be as follows. For example you have paid the VAT on purchase Rs. 100/- then your calculation will be 100 x sale value of tax free goods/total sale value of tax free goods and taxable goods.
