Input Credit of VAT

This query is : Resolved

Gourav Goyal (Querist)
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26 November 2008 hello sir/mam,

i m purchasing some material inclusive of vat and thereon an amount of subsidy is also given by the suplier.

i want to know that whather should i take the whole input VAT credit or propotionate VAT on material cost after subtracting the subsidy theron?

e.g.
material cost 1200
VAT theron 48 (@ 4%)

total price 1248

let subsidy 624

net amount payble to suplier 624

now i have two opinion.
1:-

Input VAT credit will be 24 {i.e.(1248-624)*0.04/1.04}

and the second one:-
Input VAT credit will be 48 {i.e.(1248*0.04/1.04} means the whole Input VAT.

what should i do???

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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26 November 2008 You can take full Input VAT.

Mcgupta

Mcgupta (Expert)
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26 November 2008 If the supplier is paying full vat to govt., i.e. not making any adjustment for subsidy amount, you can surely take credit of full vat amount.

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Gourav Goyal

Gourav Goyal (Querist)
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28 November 2008 thanks for ur rplys sir,

plz verify any case law or any section is there in this regard??