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Is it legal to charge VAT on MRP
21-Jun-2023 (In Tax Law)
I have ordered a pair of shoes from Jabong having MRP-Rs.9995(inclusive of taxes) as cited on the shoe box. Have applied coupon discount-30% (Rs.2998.50) Then the amount chargeable should be-Rs.6996.50 But they are again applying VAT around 5%-Rs.349.25 Making the total amount payable by me around-Rs.7346.25 Is it legal to double charge the taxes after giving discount and besides the MRP-Rs.9995 (inclusive taxes) Isn't double taxing against the trade practices and punishable under law
No VAT can be imposed if MRP bears "Inclusive of Taxes" Label. You can definitely go to consumer forum and sue against unfair VAT charge ability.
State Consumer Dispute Redressal Commission (SCDRC) has clarified the situation in case of Black Bird who used to charge VAT on MRP after giving discounts.
State Consumer Dispute Redressal Commission (SCDRC) has clarified the situation in case of Black Bird who used to charge VAT on MRP after giving discounts.
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Adv. Anuj Bhasin
Delhi | 25+ Answers
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Every manufacturer as per Legal Metrology Acts and Rules need to furnish label on the packaged commodity showing the Maximum Retail price along with other details. As you mentioned, the MRP of the shoes were Rs. 9995/- (inclusive of taxes) it means this product cannot be sold on a price higher than Rs. 9995/-. However, if the company decides to give any discount, like in your case, then the value of the product is lesser than Rs. 9995 which will be considered as not inclusive of taxes. Had the case be that the vendor has charged VAT on MRP (i.e. VAT over and above Rs. 9995/-) then you can file a case against such vendor and also file a complaint to the government authorities.
However, in your transaction vendor can charge VAT on discounted value of the product.
However, in your transaction vendor can charge VAT on discounted value of the product.
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Adv. Deepak Thackur
Delhi | 25+ Answers
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sir,
Thats unfortunate that you have been taxed twice. No it is no legal to charge tax after giving discount. Since tax is charged only once. You have also said that the thing you had bought is inclusive of taxe which means your product is already charged from tax. double taxing is against the trade practice and is punishable with fine. In this case if you make a complaint to Jabong you may get your refund that is charged from you. Else you can file a case in consumer forum for the wrong trade practices done by the company.
Thats unfortunate that you have been taxed twice. No it is no legal to charge tax after giving discount. Since tax is charged only once. You have also said that the thing you had bought is inclusive of taxe which means your product is already charged from tax. double taxing is against the trade practice and is punishable with fine. In this case if you make a complaint to Jabong you may get your refund that is charged from you. Else you can file a case in consumer forum for the wrong trade practices done by the company.
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Adv. Bhavishya Mehra
Delhi | 25+ Answers
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