If the Maximum Retail Price (MRP) says its includes VAT, does the seller anyway hav to calculate the VAT on the MRP?

asked Nov 26, 2016 in VAT by EXMAC (130 points)
If the selling price says inclusive of VAT, say Rs. 100 based on tax fractions is the supplier anyway have to pay 100x15%=15 to the IRD?

1 Answer

+1 vote
answered Nov 26, 2016 by Visio (4,210 points)
Yes of course. If the buyer is not vat registered, the seller is not even required to show the VAT separately.
commented Nov 27, 2016 by EXMAC (130 points)
Tks. for the response Sahan, but is there a exemption of some sort say you are retailing your product through a supermkt. chain then you dont have to pay a VAT component on the commission paid to the supermkt.? Say my MRP is 100/- but i pay a 10/- commission to the supermkt. than can i calculate the VAT only on the 90/-
commented Nov 27, 2016 by Visio (4,210 points)
You should then invoice the supermarket at 90. If you invoice at 100 then vat is applicable on 100. Another option is to invoice at 100 and get a vat invoice for 10 from supermarket. So that although you pay vat for 100, you get input vat on 10.
commented Nov 27, 2016 by EXMAC (130 points)
Noted & Tks. Sahan, But if the price published in the product is 100 and it says inclusive of VAT then, according to the VAT law (fraction)/IRD the supplier is obliged to pay 15/- as VAT to the IRD irrelevent of what sort of arrangement is there with the supermkt. isnt it?
commented Nov 27, 2016 by Piyalsri (550 points)
Yes it is. Retail & whole sale threshold is 12.5m per quarter or 50m per year if your sales less than that then you dont need to pay VAT