abhishreshthaa
Abhijeet S
What are the effects of change in classification under the VAT law?
The effects of change in classification are as follows:
The classification of goods, by the states, for the rate of tax would be more or less the same. In other words, there could be homogeneous classification of goods by all the states.
There could be re grouping or re classification of goods, which may have the effect of increase or decrease in the rate of tax, as compared to sales tax regime.
Generally, what could be the different types of sales transaction / movement of goods?
The different types of purchase transaction / movement of goods could be as follows:
Sale within the state
Inter state sale
Exports outside India
Stock transfer
Sale outside the state
Generally, what could be the different types of purchase transaction /
movement of goods?
The different types of purchase transaction / movement of goods could be as follows:
Purchase within the state
Inter state purchase
Imports from abroad
Purchase from outside the state
Stock from outside the state
Stock transfer from within the state
How would the leasing transaction be affected under VAT?
Under VAT regime, the leaser may be allowed to avail credit of tax paid on purchase.
Similarly the leased may also be entitled to avail input tax credit on capital goods obtained on lease.
What would be the effect of VAT on works contract transactions?
Under VAT regime the contractor may be entitled to input tax credit for purchase of goods for
Direct use
Manufacture of goods to be used in works contract
Capital goods, subject to conditions
Possibly on consumables
In case of the contractee, he may be eligible to claim credit for VAT paid on:
Assets – directly used for manufacture of goods
Processing or job work manufacture, etc.
Otherwise VAT effects in case of a contractor or contractee may be same as in the case of a manufacturer or trader.