APPLIED INDIRECT TAXATION 11712 When goods are sold by Principal Manufacturer

Applied indirect taxation 11712 when goods are sold

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Question: A Trader supplies raw material of `1,150 to processor. Processor processes the raw material andsupplies finished product to the trader. The processor charges `450, which include `350 as processing expensesand `100 as his (processor’s) profit. Transport cost for sending the raw material to the factory of processor is`50. Transport charges for returning the finished product to the trader from the premises of the processor is`60. The finished product is sold by the trader at `2,100 from his premises. He charges Vat separately in hisinvoice at applicable rates. The rate of duty is 16% plus education cess as applicable. What is the AV, and whatis total duty payable ?

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