Preparing the System for
and Purchase Statements
Backgrounder on Tax Types
To identify the tax status of any item we need to inform the system about
- The Location of the Vendor (Purchase Party)
- The Location of the Customer
- Type of Item
(This example is only for illustration.
Please contact your tax consultant for a complete understanding on
the taxation issues).
- Vender X is a registered dealer located with in the state.
- Vender Y is located out of state.
- An item “A” is covered in the tax slab of 5%
In the current VAT era...
All items are to be treated as taxable. All VAT collected by your seller (from whom you purchase) will be treated as input VAT credit.
In Chhattisgarh, medicines have been kept out of the perview of this tax system. Here the dealers of medicines have the option of charging Tax on MRP at the first point of sale in the state.
- If your tax payble is more than the input credit then you will be expected to pay tax above the that amount.
- If your tax payable amount is less than the input credit, the in balance input credit will be carried forward for the next period.
Note: This system of Tax on MRP was declared invalid by the Supreme Court of India.
In the pre-VAT era...
if the “A” is purchased from “X”, the tax for the item would
already have been paid i.e. the item A is considered Tax-Paid. But if the same item “A” is
purchased from “Y”, the applicable tax has to
be paid ie. the item A is Taxable.
Again, the tax status would be still different if the items are
sold to a out-of-state customer.
Thokdawai allows you...
- To define all the possible tax combination.
- To generate the sale values for all the different type
of tax situations.
Thokdawai also allows you to maintain transaction wise taxable status of
any item. You can buy the same item from an out-of-state vendor in one transaction
and from an in-state vendor in the other. The system can give you tax-wise
status of each transaction.
- Taxable Sale
- Tax-Paid Sale
- Government Sale (Form D)
- Out-Of-State Sale against In-State Purchase
- Out-Of-State Sale against Out-Of-State Purchase
- Sale against Form F Transfer (Consignment)
The system also gives a statement by which you can have a comparison of the actual VAT applicable and the VAT recovered against each and every sale bill.
How do defne and mark tax types?