Whether VAT input credit can be availed and utilised in the following scenario ?
1 The company's Finished Product is exempted from VAT. 2 It pays VAT at the time of purchasing Raw Materials etc. 3 Scrap is generated during manufacture of Finished Product and the same is sold. VAT is collected and paid during such sales. 4 Can the company avail input credit on purchase of Raw Materials etc. and then utilise the same against VAT liability arising on account of sale of scrap? 5 Is there any provision for claiming input refund of VAT paid on purchase of inputs(ie Raw Materials etc.).
09 July 2009
If finish good is exempted from sale tax vide any Notifification or Schudle,VAT credit can not be admissable. but if there is no exemption but sale tax rate is 0%, i.e. sale tax rate is 0% on Export sale, ofcourse one can avail the VAT credit, and can utilise against his sale. Yes there is refund provision for unulilized VAT credit.
CAclubindia
