Accountancy Forum

Dear Expert,

I am an employee of a reputed Electrical Engineering Company with both manufacturing and services facilities. Our company works on JOB ORDER basis where an enquiry arise alongwith detail tender documents and we submit our competitive quotation to customer. The problem is that some times client mention (in its tender documents) that prices are inclusive of all taxes and duties and prices to be filled in rate basis. In response to above we load sales tax and SED above the final quotation prices and submit this to customer.

a) What is the treatment of sales tax on our part and how can we claim the amount we paid to our suppliers as Customer does not provide us sales tax invoices?

b) What is the treatment of Sales tax on Customer part because he is purchasing goods from us and he is bound to pay sales tax?

Please remove my confusion.


Thanks and Lots of Regards.

@d!l

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Adil.Iqbal</i>
Dear Expert,

I am an employee of a reputed Electrical Engineering Company with both manufacturing and services facilities. Our company works on JOB ORDER basis where an enquiry arise alongwith detail tender documents and we submit our competitive quotation to customer. The problem is that some times client mention (in its tender documents) that prices are inclusive of all taxes and duties and prices to be filled in rate basis. In response to above we load sales tax and SED above the final quotation prices and submit this to customer.

a) What is the treatment of sales tax on our part and how can we claim the amount we paid to our suppliers as Customer does not provide us sales tax invoices?

b) What is the treatment of Sales tax on Customer part because he is purchasing goods from us and he is bound to pay sales tax?

Please remove my confusion.


Thanks and Lots of Regards.

@d!l
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Income Tax 2001 and Sales Tax Act mention separate formats
of invoices but according to tax law a singhle invoice can be issued to client it means you do not required to obtain or issue different invoices for IT and ST purpose. The main question is that whether your supplier is Sales Tax registered or not. If the supplier issales tax registered then his sales tax registration number is enough. You can adjust the sales tax charged by your supplier at the time of filling monthly sales tax as per allowed percentage,mentioned in sales tax act.

The sales tax charged by your company is input tax for your client
if he uses supplies for production or your supplies are directly used in production or for provision of services but if it is not so he cannot adjust sales tax charged by your company against output tax.


Regards,

Awsais

Thank You for ur responce !!!


Pls clarify in any situation if a person is making a supply to a register person can not deduct sales tax???

If not what are the penalties??