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Sudip (MD)     13 January 2013

How i can pay vat of rs 27000? when my monthly profit is 30k

Dear sir, I am a manufacturer of baking powder and few other bakery products. i have a very nominal gross profit of approx 15 %.. My monthly turnover is approx 2 lakh. so my profit is Rs 30 approx. thousand / month. In west Bengal baking powder VAT is 13.5% as the product is not in the West Bengal VAT schedule. My problem is, my monthly TAX is around Rs. 27000. which is very hard for me to pay all the time.. I don't want to be a defaulter and like to pay my taxes in time but i cant get out of this horrible situation. Sir, i will be highly obliged if you can help me to get out of this situation. Please help me in this matter.


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 9 Replies

V.Devananda Narasimham (Advocate)     13 January 2013

You need not pay tax from your gross profit. You can collect tax against  sale value from your client. Selling cost plus tax is the generally accepted method. If  gross profit is inclusive of tax portion, you are required to pay tax from it without any dispute. 

Sudip (MD)     13 January 2013

Thank you sir for you kind reply. Yes the gross profit i mentied is inclusive of taxes, i cannot increase my sale price as the market is very compitative. lots of people are taking wrong path to sale thir products. I dont want to take any dishonest ways.

Sir please suggest like small dealer, bellow 5 LAKH YEARLY TURNOVER is their any other registration of VAT dealers whos turnover is within 10 - 50lakh and they have to pay 1% of gross sale amount ... otherwise i dont have any other option than to stop the business ..

Sir, Please suggest.

With regards.

V.Devananda Narasimham (Advocate)     13 January 2013

Which is your State

V.Devananda Narasimham (Advocate)     13 January 2013

Which is your State in order to find out statutory provision. Normally  manufacturer is considered as 1st seller not entitled to get presumptive tax dealer benifit.

Sudip (MD)     13 January 2013

I am from west bengal. kolkata.

V.Devananda Narasimham (Advocate)     14 January 2013

As stated by you total turnover for a year may be more than 36 lakhs. According to WB VAT Act, manufacturer is liable to pay tax on products, if his turnover exceeds 5 lakhs per year.

Sudip (MD)     15 January 2013

No Sir, my turnover never crosses 24 lakh, as i ve stated approx. 2 lakh/month .which is  approx  24 lakh / yearly. .. from where u got the figure 36 lakh ? 

V.Devananda Narasimham (Advocate)     15 January 2013

OK, I considered monthly sales turnover as 3 lakhs instead of 2. However annual turnover is morethan 5 lakhs liable to pay tax. For further details you may contact local tax practitioner or an advocate.

Sudip (MD)     17 January 2013

ok Sir, Thank you very much.


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