Consignment Sales

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This topic contains 1 reply, has 2 voices, and was last updated by +918826618099 +918826618099 2 years, 3 months ago.

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  • #2404
    Murlidhar Arvapalli
    Murlidhar Arvapalli
    Participant

    We have Consignment Sales from the Supplier who are VAT Compliant but we are not recording any purchases in our books on supply by them but at the month end we are paying after deducting the agreed margin from the Sales amount and in this situation while paying to them their cost value do we need to pay VAT amount to them if so they need to submit their invoice to the extent of Sales happened in our store with their cost value or any other appropriate method in such situation please advise.

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  • #2526
    +918826618099
    +918826618099
    Participant

    Based on the facts enumerated, you appear to qualify as a disclosed agent. A disclosed agent is only required to charge VAT on his commission and not on sales made on behalf of the client. However, there are documentation requirements to justify the relationship and to prove that you are acting only on behalf of client.

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