| ANNEXURES |
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| Annexure 1: Net
Receipts (or Value Added) Method |
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| Subtraction
Method |
Primary |
Toy |
Wholesale |
Retailer |
Total |
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Producer |
Maker |
Dealer |
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| Sales |
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100 |
200 |
250 |
300 |
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| Purchases |
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0 |
100 |
200 |
250 |
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| Net Receipts
(Value |
100-0 |
200-100 |
250-200 |
300-250 |
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| Added) |
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=100 |
=100 |
=50 |
=50 |
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| VAT @ 10% to be
paid |
10% of 100 |
10% of 100 |
10% of 50 |
10% of 50 |
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= Rs.10 |
= Rs.10 |
= Rs.5 |
= Rs.5 |
Rs.30 |
| Source:
Bagchi(2005), Money & Finance, Volume 2, Number 20-21 |
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| Annexure II:
Invoice-Credit Method |
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| Invoice-credit
Method |
Primary |
Toy |
Wholesale |
Retailer |
Total |
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Producer |
Maker |
Dealer |
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| VAT due on
sales |
10 |
20 |
25 |
30 |
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| Less: VAT paid on |
0 |
10 |
20 |
25 |
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| purchases |
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| VAT @ 10% |
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10-0=Rs.10 |
20-10=Rs.10 |
25-20=Rs.5 |
30-25=Rs.5 |
Rs.30 |
| Source:
Bagchi(2005), Money & Finance, Volume 2, Number 20-21 |
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| Annexure III:
Trader Liability |
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| VAT
liability = MRP* tax fraction - Purchase price * tax fraction where tax
fraction for |
| this purpose is
R/1 + R where R is rate of tax in fraction (eg. For 4 % rate of tax, R -0.04 |
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| Rate of VAT |
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Tax Fraction |
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| Goods taxable
at 1.0 % |
0.0099 |
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| Goods taxable
at 4.0 % |
0.0385 |
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| Goods taxable
at 12.5 % |
0.1111 |
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| Goods taxable
at 20.5 % |
0.1667 |
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| Example |
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A |
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B |
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Sells for |
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Sells on MRP |
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Rs 180 |
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Rs.200 |
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| VAT to be
deposited by B |
=
Tax Liability - Input Tax Credit |
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| a) If the goods
are taxable @ 4% = 200* 0.0385 - 180 * 0.0385 |
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= 7.70 |
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= Rs 0.77 |
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| b) If the goods
are taxable @ 12.5% = 200* 0.1111 - 180 * 0.01111 |
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= 22.22 |
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= Rs 2.22 |
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| b) If the goods
are taxable @ 20% = 200* 0.1667 - 180 * 0.1667 |
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= 33.34 - 30.01 |
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= Rs. 3.33 |
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| If the trader
is selling goods on M>R>P and wants to caluculate the Base Price, its
as |
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| Base Price =
MRP * fraction |
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| = MRP * 1/1 + R |
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| where R is rate
of tax in fraction (eg. For 4 per cent rate of tax R = 0.04). |
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| MRP |
Rate of VAT |
Tax Fraction |
Base Price |
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| (Rs.) |
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(1/1+R) |
Rs. |
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| 200 |
4.0 |
1/1+0.04 |
192.31 |
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| (suppose) |
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=0.9615 |
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12.5 |
1/1+0.125 |
177.78 |
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=0.0889 |
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20.0 |
1/1+0.20 |
166.67 |
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=0.8333 |
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| Source:
Government of National Capital Territory of Delhi. |
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