TAX RATES & CALCULATION OF TAXES
- HOW TO CALCULATE GROSS TURNOVER?
Gross turnover means the aggregate of the sale prices received or receivable in respect of any goods sold (whether as principal, agent or in any other capacity).
Gross Turnover shall also include the value of goods exported out of State or disposed of otherwise than by sale;
Special points while determining gross turnover
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Transactions of forward contracts
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The aggregate of prices of goods in respect of transactions of forward contracts, in which goods are actually not delivered, shall not be included in the gross turnover.
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Price escalation
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Any amount received or receivable on account of escalation in the price of any goods sold previously to any person but not exactly determinable at that time, shall, subject to conditions and restrictions, be included in the gross turnover.
Conditions
(i) The selling dealer shall issue to the purchaser a supplementary tax/sale invoice in respect of any escalation in the price of the goods sold previously as soon as the amount of such escalation, whether interim or final, is settled between the two.
(ii) The invoice shall contain reference of the original invoice(s) issued previously in respect of the sale of the goods.
(iii) A supplementary tax/sale invoice issued under the circumstances when the agreement of sale provides for escalation in the price of the goods sold and the final prices of the goods could not have been determined at the time of their original sale, shall, for the purposes of the Act and these rules, be treated as a fresh invoice and shall be given effect accordingly, otherwise, the invoiced amount shall be added back to the gross turnover for the tax period in which the original sale was made and shall, notwithstanding any limitation, be assessed to tax.
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Price de-escalation
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Any amount paid or payable on account of de-escalation in the price of any goods sold previously to any person but not exactly determinable at that time, shall, subject to conditions and restrictions be excluded from the gross turnover.
Conditions
(i) The purchasing dealer shall issue to the seller a duly signed debit note in respect of any de-escalation in the price of the goods purchased by him as soon as the amount of such de-escalation, whether interim or final, is settled between the two.
(ii) Debit note shall necessarily contain the following particulars, namely:
Ø Date of issue of DN;
Ø Name of the dealer (with TIN, where applicable) issuing DN;
Ø Name of the seller (with TIN, where applicable) to whom DN issued;
Ø Description, quantity and amount of de-escalation in respect of the goods whose value de -escalated;
Ø Tax, if any, relating to the amount of de-escalation;
Ø Date(s) and number(s) of original invoice(s) issued by the seller in respect of the sale of the goods referred to in item ‘Description, quantity and amount of de-escalation in respect of the goods whose value de -escalated’.
(iii) The amount mentioned in a debit note issued under the circumstances when the agreement of sale provides for de -escalation in the price of the goods sold under the agreement and the final prices of the goods could not have been determined at the time of their original sale, shall, subject to the purchasing dealer, wherever applicable, reversing input tax relating to the amount of de-escalation, be reduced from the gross turnover in respect of the tax period in which the debit not e was issued otherwise, it shall be ignored.
(iv) Where the person returning the goods is not a dealer or is a dealer in other State who did not issue a debit note in respect of de -escalation in the price of the goods, the dealer who sold the goods may issue a credit note for the amount of de -escalation and deduct such amount from his gross turnover, and he shall, when so required by an assessing authority, furnish evidence of the credit of the amount of de -escalation to the account of, and payment to, the purchaser of the goods.
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Tax
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Any amount collected by the dealer by way of tax shall not be included in the gross turnover and where no tax is shown to have been charged separately, it shall be excluded from the taxable turnover (‘TTO') taxable at a particular rate of tax in per cent (‘r’) by applying the following formula:
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Indian needs GST, today a simplified taxation system easy to comprehend and apply.
- COMPOSITION SCHEME: PAYMENT OF LUMPSUM IN LIEU OF TAX
Refer topic on ‘Composition Scheme’
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