Input credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 October 2013 One of my Assessee had claimed VAT Credit on purchase of Capital Goods. Afterwards, the Co. received subsidy from the government against the same Machinery. Now, VAT Department demands the VAT Credit to be reversed proportionately. However, there are no provisions regarding reversal of ITC on receipt of subsidy under GVAT. Is my stand legally tenable? Please make reference to case law, if any

CA UMESH DULAL

CA UMESH DULAL (Expert)
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24 October 2013 if you have received the subsidy for entire amount including ITC, then department may invoke the provision of "principle of unjust enrichment" to demand the reversal of ITC.

i.e. you can not take benefit of same amount twice, so you have to reverse the input