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Error in your VAT Examples provided in the article
by Amit Sanghavi on May 11, 2005 05:34 PM
The Example B which is recommended and should be followed while implementing VAT is wrongly calculated or printed.
This is the right calculation
Example B (Rs)
Basic purchase price 10,000
Add 12.5 per cent VAT 1,250
VAT inclusive purchase price 11,250
Less VAT input 1,250
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VAT free purchase price 10,000
Add overheads 100
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Total 10,100
Add 20 per cent profit margin 2,020
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Basic selling price 12,120
Add 12.5 per cent VAT 1,515
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VAT inclusive selling price 13,635
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So now the net difference between the VAT Inclusive selling price of Eg. A and B is Rs.1688/-.
Pls Rectify.
Amit Sanghavi.
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