Dear All,
Be careful with the discount offer given by the companies/brand. They are doing big fraud and you are not at all aware of it.
Lets take an example: When you see any discount offer like 30% (*Vat extra). What do you understand by that?
- You'll get 30% discount on MRP and you need to pay VAT extra, correct?
- Extra VAT on which amount, discounted or amount after discount?
Here they do fraud with you and make unaccountable money.
They say they are taking complete VAT amount from you as they have already paid to government so they take 5% (VAT) on the amount after discount.
They should take VAT on discounted amount, not on the amount after discount.
For example:
- You are buying one shirt of 1000/- (MRP) which is having 30% discount.
- So you'll be billed like : 1000 - 30% = 700 + 5% (VAT) = 735/-
The calculation does not seem to be that simple as it seems. VAT is included in the MRP. Tax component and tax exclusive price can be calculated by applying tax fraction
MRP * [r/(r+100) where r is the tax rate] on the MRP.
Let us say MRP is Rs. 1000 and the VAT is 5%. In that case, the VAT component is
1000 * (5/(5+100)) = 1000 * 0.047619048 = 47.619048
Rs. 47.62. Now, if you get that product at discounted price of Rs. 700, in this case the VAT component is Rs. 33.33.
So, for the shop-owner the loss on VAT paid to the government is 47.62-33.33 = 14.29.
- Correct calculation: 1000 - 30% = 700 + (5% of 300 = 14.29) = 714.29/-
Today I have argument with one of brand (SS) on this and they said this in system, when I explained complete calculation that person (on counter) accepted and given me on actual price.
So be careful while taking discount and raise your voice to stop corruption and save your money.
-=vipsy
Be careful with the discount offer given by the companies/brand. They are doing big fraud and you are not at all aware of it.
Lets take an example: When you see any discount offer like 30% (*Vat extra). What do you understand by that?
- You'll get 30% discount on MRP and you need to pay VAT extra, correct?
- Extra VAT on which amount, discounted or amount after discount?
Here they do fraud with you and make unaccountable money.
They say they are taking complete VAT amount from you as they have already paid to government so they take 5% (VAT) on the amount after discount.
They should take VAT on discounted amount, not on the amount after discount.
For example:
- You are buying one shirt of 1000/- (MRP) which is having 30% discount.
- So you'll be billed like : 1000 - 30% = 700 + 5% (VAT) = 735/-
The calculation does not seem to be that simple as it seems. VAT is included in the MRP. Tax component and tax exclusive price can be calculated by applying tax fraction
MRP * [r/(r+100) where r is the tax rate] on the MRP.
Let us say MRP is Rs. 1000 and the VAT is 5%. In that case, the VAT component is
1000 * (5/(5+100)) = 1000 * 0.047619048 = 47.619048
Rs. 47.62. Now, if you get that product at discounted price of Rs. 700, in this case the VAT component is Rs. 33.33.
So, for the shop-owner the loss on VAT paid to the government is 47.62-33.33 = 14.29.
- Correct calculation: 1000 - 30% = 700 + (5% of 300 = 14.29) = 714.29/-
Today I have argument with one of brand (SS) on this and they said this in system, when I explained complete calculation that person (on counter) accepted and given me on actual price.
So be careful while taking discount and raise your voice to stop corruption and save your money.
-=vipsy
