No Need To Pay Value Added Tax (VAT) On The Products Sold At Discount Rate: Consumer’s Body

The Logical Indian Himachal Pradesh

February 9th, 2017 / 4:45 PM

VAT On Discount Goods

Source: TOI  taxscan Representational Image: fashalot

The apex consumer body, National Consumer Disputes Redressal Commission (NCDRC) has ruled that the shops cannot charge extra VAT on items sold at discount prices.

The consumer body held that shops selling goods at a discount cannot charge VAT or any other duty on the discounted price as the rebate is on the Maximum Retail Price and it already includes all the taxes and cess, as mentioned in Section 2(d) of the Consumer Goods Act.

This order came last month after the state forums rejected the plea of Woodland Franchises in Delhi and Chandigarh that had refused to pay back the VAT charged to customers on jackets which were sold at ‘flat 40% discount’.

On 26 January 2016, the complainant purchased a men’s jacket from the outlet of the petitioner. The MRP on the sticker was Rs 3,995. After deducting 40% discount on this price, an additional 5% VAT was levied on this final price. That is, instead of charging Rs 2,397 after the discount, the customer was charged Rs 2,517. This means that the discount was less than the ‘flat 40%’ that they claimed.

His complaint was rejected by the petitioner (company) because of the terms and conditions of sale as VAT was charged extra as per the instruction of the company.

Having had realised that he was being duped into adopting the unfair practice, the complainant filed a complaint in the District Forum.

The bench headed by Justice DK Jain and M Shreesha observed that advertising as ‘flat 40% discount’ is misleading to the customers telling them that the merchandise is available at a lower price, but this is not the final bargain price. This is tantamount to unfair trade practice.

The complete case can be read here.

The Logical Indian welcomes this judgement as it is in the interest of the customers. We hope that this will help end misleading discount claims.

 


Contributors

Edited by :

Share your thoughts..

Related Stories

GST Taken From Online Shoppers Not Returned After Tax Rate Cut By E-Commerce Sites

GST Council Meet: Government Cuts GST Rate On 88 Items, Makes Sanitary Napkins Tax-Free

Karnataka Budget

Rs 34,000 Crores Farm Loan Waiver While Tax Rate On Fuel To Go Up; CM Kumaraswamy In K’Taka Budget

ltcg

Pay LTGC Tax On Long-Term Capital Assets From April 1; All You Need To Know

Handloom

Handmade Products Which Were Earlier Tax Exempted, Now Attract GST Between 5% To 28%, Activists Demand Rollback

Karnataka Budget

Karnataka Budget: Movie Ticket To Not Cost More Than Rs 200, VAT On Liquor Removed, Other Highlights

Latest on The Logical Indian

News

11 Lions Die In 8 Days In Gir Forest, Officials Say Deaths Due To Infighting And Not Foul Play

Health

Doctors Must Write Prescriptions In Capital Letters: Jharkhand Govt Issues Notification

News

Disclose Names Of IIT JEE Qualifying Candidates: IIT-G Students Demand In A PIL Against ‘Super 30’ Founder Anand Kumar

News

MP: To Televise PM Modi’s Live Speech, 450 Cows Forced Out Of Cowshed, 8 Starved To Death

News

HC Gives BBMP Time Till 24th September To Fill Up 2,172 Potholes In Bengaluru

News

Gujarat And Uttarakhand Are Not ODF States As Declared: CAG Report

x

Stories that deserve attention, delivered to your inbox!

Handpicked, newsworthy stories which deserve the attention of a rational generation.