EXCESS IN PUT VAT CREDIT

This query is : Resolved

P.S.VISHWANATHAN

P.S.VISHWANATHAN (Querist)
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16 September 2008 NEARLY 60%OF OUR PURCHASES ARE MADE LOCALLY AND ALMOST ALL OUR SALES ARE INTERSTATE SALES. AS A RESULT,WE ARE NOT ABLE TO ADSORB THE IN PUT VAT CREDIT AGAINST OUR CST LIABILITY.(IN PUT VAT MOSTLY 12.5% WHILE CST IS 2%) SINCE OBTAINING REFUND FROM THE DEPARTMENT IS A CUMBERSOME PROCEDURE,CAN WE WRITE OFF IN PUT VAT AS PURCHASE?

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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16 September 2008 In my opinion, VAT input credit can not be written off against purchases.

Only because obtaining refund from the department is a cumbersome procedure, it should not be written off.

In case your claim of refund is not met by the officials within prescribed time, it is advisable to raise this issue beofre the highest authority.