Whether vat levy on discount on purchases is taxable?
rksoni
(Querist) 11 September 2011
This query is : Open
400000/- is debited to Discount on purchases.the amt has been debited to Trading A/c and had reduced from total purchases.But the supplier has not claimed any credit for the same i.e.had paid all the vat according to our gross purchases.He had also forwarded the undertaking for not reversing the tax into his returns. But ,the vato is unsatisfied & had determined the tax,interest & penalty thereon.
In fact,the dealer has received the credit note after every quarter. It is also confirmed by the supplier that he had forwarded the credit note on A/c of Turnover discount and paying off the amt of said purchases before time i.e.cash discount.BUT,ONE ANOTHER PROBLEM IS THAT THE DISCOUNT HAS BEEN REDUCED FROM THE PURCHASES IN OUR BALANCE SHEET WHICH HAS ALREADY BEEN SUBMITTED TO CONCERN AUTHORITY.PL.ADVICE ME CAN WE CHALLENGE HIS ORDER AND IF POSSIBLE PL.GUIDE ME THE SUITABLE CITATIONS.BOTH THE SALER & BUYER ARE REGD DEALER FROM DELHI.THX.
