27 April 2013
I am doing audit of a manufacturing concern in Goa. The concern manufactures excisable goods and takes credit of CENVAT (input excise and input service tax)
In case of Vat it is taking credit of local input Vat but I saw that incase of interstate sales it is paying the CST collected as it is without taking credit of input CST.(input CST is added to purchase figure) Note: It is filing the both VAT & CST returns. Is this Correct? Is there any Section in Goa VAT Act which is prescribing this treatment?
27 April 2013
its not about goa or some other state. every dealer in every state takes the credit of input vat and adds the cst to purchases. reason: suppose item x . purchased in goa sold in goa. item y . purchased from delhi soldd in goa. now tax we paid for purchasing x will be received by goa government. and when we will make sale goa govt. will allow us to take credit of input vat. now when we purchase y we pay cst which goes in pocket of delhi govt. and when we sale in delhi, then goa govt do not allow us to take credit of input cst, because that was collected by delhi govt, who will not give it to goa. hence input vat credit allowed but not of cst, as input cst goes in pocket of other state govt.
hence while doing entries; input vat is current asset for as we can adjust it later, but input cst we can't adjust later, cost for us and there for we add it with purchases as expense.
CAclubindia
