URD purchases liable to taxable in hands of buying dealer - Professionals - Taxation - TIK Share
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URD purchases liable to taxable in hands of buying dealer


CA Pulkit Sharma

2013-12-27

Good purchased from Unregistered Dealers (URD) is liable to tax in hands of buyers.

As per Karnataka Vat Act and rules definition of turnover includes:

  1. The total amount paid or payable by the dealer as the consideration for purchase of any goods from Unregistered Dealer.
  2. The total amount paid or payable to the dealer as the consideration for the sale, supply or distribution within the state of any goods, whether by the dealer himself or through the agent.
  3. The total amount paid or payable to the dealer as consideration for transfer of the right to use any goods for any purpose.
  4. The total amount payable to the dealer as consideration in respect of goods delivered on hire purchase or any system of payment by installment.
  5. The aggregate of the sale prices received or receivable by the dealer in respect of sales of any goods in the course of inter-state trade or commerce, export out of the territory of India and sales in the course of import into the territory of India
  6. The value of all goods transferred or dispatched outside the state by way of stock transfer (otherwise than by sale)

And also the act requires payment of tax by registered buyer incase he buys the taxable commodities from Un-Registered dealers.

This rule not only encourage Registration under VAT Act but also discourage buying from unregistered dealers.