Sale of scrap
A partnership concern of bangalore involved in trading of electronic items is collecting different kind of scraps from peoples and companies accross india free of cost.
It will incur cost of only transporting it to buyers from the place of donor.
There will be revenue as cost is only transportation and the whole material will be sold to some buyer at good price.
So what type of taxes will it incur in karnataka and how much..?
Depending on the Goods it has been purchased.
Buying from unregistered Dealer is taxable at 5% and 14.5%. All other same provision will be applicable as per Karnataka VAT Act.
For most of the cases the sellers are individuals or URD no bill will be there for such purchase and all are interstate. so how it is going to work
You have to get registration under VAT Act.
You have to file the return on the basis of your purchase and Sale.
You have to prepare voucher for the Amount of purchase as URD purchase and take signature of the seller
- any address proof to be attahced to such voucher which is if not available ok has to be explained at the time of Assessment.
- Seller is sold at the invoice of your company name.
- The above is for purchase within state and Selling outside state from your registered VAT State.
If it is collecting from outside the State then It is quite difficult but You have to show it as URD purchase only. and shall be sold by you i.e. Invoice from your address to Buyer.
BUT Transporting of Material from The place of Donor to the place of Buyer will need some documents which shall be prepared.
Firm is alrealy a registered dealer under karnataka VAT.
Mr. X gives me 5ton of scrap in mumbai
i will take it directly to Mr. Y in assam
so i just need to take a declaration letter form MR.X for giving such scrap and have to raise a CST taxed bill to Mr. Y for such sale?
and transportation charges will be my cost of products.
You are right. You can go ahead with it. BUT You need to show it as E1,E2 etc purchase kind.
As If you raise the Invoice Material will be moving from Mumbai to Assam