MVAT ACT 2002 REDUCTION OF SALE PRICE FOR LEVY OF TAX

2.  RATE OF REDUCTION
Reduction in Set-off.
At 3%
At 2%
At 4%
At 8%,50%.
 RESTRICTONS
 No set –off
 Set-off on corresponding purchases.

3.  Reduction In Set- off:
The amount of set off, available to registered dealer
u/s 2(8), shall be reduced to the extent as provided,
under the following circumstances:-
3% of the purchase price of respective goods, if taxable goods
used as fuel.
a) Purchase of Natural gas at 3%.
b) Office equipment's, Furniture and Fixtures at 3%.

4.  At 2%
 Taxable Goods Purchased by Manufacturer of
Tax-free Goods
Schedule A u/s (5)which has a nil tax on
some goods.
Necessity goods.
Milk, fruit, salt, books, etc…
 Packing Material Used by Reseller of Tax-free
Goods.
Packing of necessity goods.

5.  At 2%
Electricity companies:
Licence for generation.
Licence for transmission.
Licence for distribution.
Textile processing
The packing of the textiles.
On purchases of capital assets of
dealers.

6.  At 4% of Schedule rate
Stock Transfers of Taxable Goods
Outside State (not returned within 6
months) .
Stock Transfer of Motor Spirit: If the
dealer is the manufacturer of motor
spirit(schedule D -5,6,7,8,9).

7.  At 1%
 If Stock Transfers of Schedule B Goods to
Branch Outside State.
 At 8%
At 16/25 of Work contract under 8% Tax
Composition scheme.
 At 4%
Purchase Price for Construction Contract
Under 5%Tax Composition Scheme.

8.  No Set-Off on Stock on Date of
Discontinuance of Business
In which the dealer is engaged to be
discontinued.
 Set off only on Corresponding Purchases
,If Receipts Below 50% of Sales.
Hotels and Clubs
Manufacturer
Others
Exclude Branch Transfers.