Maharashtra VAT Rules

Reduction Of Sale Price For Levy Of Tax.

1. A registered dealer may, in respect of any sale effected by him on or after the appointed day on which sales tax is payable by him and where he has not separately collected any amount by way of sales tax, deduct from the sale price of the goods a sum calculated in accordance with the formula.
2. A registered dealer may, in respect of any resale of goods made after the appointed day of goods originally manufactured whether before or after the appointed day by an unit under the exemption mode of any Package Scheme of Incentives, for the purpose of levy of tax deduct from the sale price of the resale of such goods an amount calculated in accordance with the following formulae:-
   1. where the goods are purchased by the claimant dealer whether before or after the appointed day and tax is not recovered separately from the claimant dealer in his purchase invoice

      Amount of deduction = Amount of purchase price including the price of goods used in packing if the packing is charged separately.

   2. where the goods are purchased by the claimant dealer after the appointed day from a registered dealer who has separately recovered tax from the claimant dealer

      Amount of deduction = P - ( T X 100 / R )

      where P is the aggregate of the purchase price of the goods, and of the goods used for packing of the said goods if the packing is charged separately. T is the amount of tax recovered separately from the claimant dealer in respect of the purchase of the goods and R is the rate of tax generally applicable to the sale of such goods.

   3. A registered dealer in respect of the resale effected by him on or after the appointed day of goods originally manufactured by an exemption unit and which are held by him in opening stock on the appointed day may reduce from the sale price his purchase price if the said goods are supported by a bill or cash memorandum as provided in clause (aa) of rule 53 of the Bombay Sales Tax Rules, 1959, as the rule stood immediately before the appointed day.

      Where the sale price is to be reduced in accordance with sub-rule (1) and also sub-rule (2), then the sale price shall first be reduced in accordance with sub-rule (2) and the reduced sale price shall be further reduced in accordance with sub-rule (1).

      Where a registered dealer has sold any goods after the appointed day by way of delivery of goods on hire-purchase or any system of payment by instalments, then he may deduct from the sale price, the component of interest, contained in the sale price, if the agreement for sale is reduced to writing and the component of interest is specified therein.

Determination of sale price and of purchase price in respect of sale by transfer of property in goods [whether as good or in some other form] involved in the execution of a works contract.

1. The value of the goods at the time of the transfer of property in the goods [whether as goods or in some other form] involved in the execution of a works contract may be determined by effecting the following deductions from the value of the entire contract, in so for as the amounts relating to the deduction pertain to the said works contract:--

   labour and service charges for the execution of the works where the labour and service done in relation to the goods is subsequent to the said transfer of property;

   amounts paid by way of price for sub-contract, if any, to sub-contractors ;

   charges for planning, designing and architect's fees;

   charges for obtaining on hire or otherwise, machinery and tools for the execution of the works contrct;

   cost of consumables such as water, electricity, fuel used in the execution of works contract, the property in which is not transferred in the course of execution of the works contract;

   cost of establishment of the contractor to the extent to which it is relatable to supply of the said labour and services;

   other similar expenses relatable to the said supply of labour and services, where the labour and services are subsequent to the said transfer of property;

   profit earned by the contractor to the extent it is relatable to the supply of said labour and services;

   Provided that where the contractor has not maintained accounts which enable a proper evaluation of the different deductions as above or where the Commissioner finds that the accounts maintained by the contractor are not sufficiently clear or intelligible, the contractor or, as the case may be, the Commissioner may in lieu of the deductions as above provide a lumpsum deduction as provided in the Table below and determine accordingly the sale price of the goods at the time of the said transfer of property.

2. The value of goods so arrived at under sub-rule(1) shall, for the purposes of levy of tax, be the sale price or, as the case may be, the purchase price relating to the transfer of property in goods [whether as goods or in some other form]involved in the execution of a works contract.