NBT is charging in different ways ?

Question

Way of Charging NBT by 3 Competitors in the Market

EX1. Value Rs    100                   Ex 2. val  100                                  Ex3. val  100

                NBT  2                                 2.04               not charge frm customer   0           

                      102                                102.04                                                 100

VAT               11.22                                11.22                                              11

invoice value 113.22                              113.26                                             111 

NBT pays to IRD 102*2/100                  102.04*2/100                                          100*2/100

                          =2.04                        =2.04                                                      =2

Company has to bare 04cents                 Nothing                                               Rs.2

As per NBT Act, NBT 2% has to charge on receipts less VAT...so in 1 and 2 example they have to pay IRD additional 04cents per invoice ??

Whereas 3rd example company pays only Rs 2

is there any any contradiction ?

Pls explain dr professional friends..Thanks in advance 

Answer 1

Yes you (the company) is paying more to IRD if you are to recover NBT from customers. You need to pay NBT on the value before VAT as per the Act.

Comments

Thankyou

On the otherhan IRD get several amount of Tax for same kind of transaction,,,,how can this correct...whatever method used,,the NBT reveivable by IRD must be same amount no?

but here may be 2.04 or 2...two different amounts????

 

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Yes. two different amounts. But I don't see a big issue here. NBT is not something like VAT where you are bound to recover from your customer and remit to IRD. Instead it is one of your direct expenses which can recover from your customer depending on your bargaining power. In case you opt to recover from customer, it is part of your revenue and therefore NBT is calculated on that too.

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"You need to pay NBT on the value before VAT as per the Act"

Can any one mention the section of the Act for above statement ...

Answer 2

We are using second method as it is the appropriate method. method one and three making loss to company, therefore not used. However all above methods are correct.

Comments

may i know why some service providers use  NBT Calculate 2/98 method ?