Gentlemen,
It
was clarified by this office letter referred above
addressed to you that non- VAT dealers can reimurse
themselves to the extent of tax paid by them on
their purchases to their vendors. It was further
stated that the fact that it is the reimbursed of
sales tax component by the retailers must be explicitly
stated in the bill and the alleged reimbursement
must not exceed the actual tax paid on the purchases.
Instances
have been brought to the notice of this that in
some cases, the chemists are not restricting themselves
to the reimbursement of taxes paid on their purchases
are charging sales tax on the entire sale value
and this tax is not paid to the Govt. Treasury since
chemists are resellers. It is also mentioned in
this office letter dt. 15/10/96 viz. That the reimbursement
tax component should be stated expiliity in the
bill and this alleged reimbursement must not exceed
the actual tax paid on the purchase. It is also
noticed that reimbursement of octroi is also made
in the bills, which varies form local area to local
area.
You
are requested to bring these facts to the notice
of the members of your Association and inform them
that excess collection of tax over and above what
has been collected at the time of first sale of
goods, would be illegal and liable to forfeiture
which may also invite penalties.
Yours
Faithfully
(R.B.Ahuja)
Sr. Asst. Comm. Of
Sales Tax
(Act & Rule) M.S. Mumbai
