Our organisation is having VAT Credit of Rs.90 lakhs. During the VAT Audit Department restricted some input credit on ineligible items to an extent of Rs.5 lakhs. In addition to that they imposed penalty and interest on the said 5 lakhs rupees.
My question is can we set off the payable amount of Rs.5 lakhs against the input credit of Rs.90 lakhs ? Can we set off the penalty and interest against input credit rather than paying the penalty and interest in cash/cheque ?
Pls clarify ASAP how can we fight with the department with respect to penalty and interest ?
CAclubindia
