In a particular tax period, Mr. Sunder Dass, a shopkeeper purchased goods worth ₹ 960000 and paid a total tax of ₹ 62750 (under VAT). During this period, his sales consisted of a taxable turnover of ₹ 400000 of goods taxable at 6% and ₹ 480000 for goods taxable at 12.5%. He also sold tax-exempted goods worth ₹ 95640 in the same period. Calculate his tax liability (under VAT) for this period.
Solution:
Cost price of good purchased by Sunder Dass = ₹ 960000
Tax paid (VAT) = ₹ 62750
Sale of goods worth = ₹ 400000
Rate of VAT = 6%
Tax paid to Govt. (VAT) = ₹ 62750
Tax liability = ₹ 84000 – ₹ 62750 = ₹ 21250
In the tax period ended March 2015, M/S Hari Singh & Sons purchased floor tiles worth ₹ 800000 taxable at 7.5% and sanitary fittings worth ₹ 750000 taxable at 10%. During this period, the sales turnover for floor tiles and sanitary fittings are worth ₹ 840000 and ₹ 920000 respectively. However, the floor tiles worth ₹ 60000 were returned by the firm during the same period. Calculate the tax liability (under VAT) of the firm for this tax period.
Solution:
Cost of floor tiles = ₹ 800000
Liability of tax of the firm = 155000 – (135000 + 4500) = ₹ 155000 – ₹ 139500 = ₹ 15500