Input Excise Duty
This query is : Resolved
29 January 2011
Dear Sirs,
We are a service provider dealing in leasing services. we have VAT registration as well. Can we claim Input Tax of VAT & Excise duty Input against the same purchase invoice?
We are a service provider dealing in leasing services. we have VAT registration as well. Can we claim Input Tax of VAT & Excise duty Input against the same purchase invoice?
30 January 2011
Input vat for setoff output vat only.
excise duty input credit only for output excise duty libility only.
service tax libility can not setoff by excise duty.
excise duty input credit only for output excise duty libility only.
service tax libility can not setoff by excise duty.
01 August 2024
As a service provider dealing in leasing services, you are typically allowed to claim input tax credit (ITC) for VAT on purchases that are used for providing your taxable services. However, the treatment of VAT and excise duty input credits may differ based on the specific nature of your transactions and the applicable tax laws.
### Input Tax Credit for VAT
**VAT Input Credit:**
- If you have purchased goods that are used for providing taxable services or for your business operations, you can claim input tax credit for the VAT paid on those goods.
- Ensure that the VAT invoices are in your name and contain all necessary details to substantiate the credit claim.
### Input Tax Credit for Excise Duty
**Excise Duty Input Credit:**
- Generally, input credit of excise duty is available for manufacturers or dealers who are involved in further production or sale of excisable goods.
- As a service provider, you would not typically claim excise duty input credit unless you are also dealing in the sale of excisable goods.
### Specific Considerations for Leasing Services
**Leasing Services and ITC:**
- For leasing services, the input credit mechanism can vary. If the leased goods involve the purchase of excisable goods, you might be eligible for input credit on those goods.
- However, leasing services primarily attract service tax (or GST, depending on the period and applicability), and the input credits would typically pertain to service tax/GST paid on input services and goods.
### Relevant Provisions and Conditions
**Under GST Regime (Post-July 2017):**
- Input tax credit under GST is available for the tax paid on inputs, capital goods, and input services used in the course of business.
- Ensure that the conditions for claiming ITC under Section 16 of the CGST Act are met, such as having a valid tax invoice and the goods/services being used for business purposes.
**Under Earlier VAT/Excise Regime:**
- If your transactions pertain to the pre-GST period, refer to the specific state VAT Act and the Central Excise Act for the rules on claiming input credit.
- Typically, VAT and excise duty credits cannot be cross-utilized unless specified by law.
### Action Steps
1. **Review Invoices:**
- Ensure that your purchase invoices are detailed, showing VAT and excise duty separately.
- Verify that the purchases are used for your taxable services/business operations.
2. **Consult Latest Provisions:**
- Check for any amendments or notifications under the GST law or respective state VAT laws that may impact your eligibility for input credits.
- Refer to Section 16 of the CGST Act and relevant state VAT Acts.
3. **Seek Professional Advice:**
- Given the complexity and potential changes in tax laws, consult a tax professional or GST consultant to ensure compliance and accurate credit claims.
### Conclusion
As a service provider dealing in leasing services with VAT registration, you can claim input tax credit for VAT on eligible purchases used for your business operations. However, claiming input credit for excise duty would depend on whether you are also involved in the sale of excisable goods. For precise guidance, especially considering the transition from VAT/excise to GST, consulting a tax professional is advisable.
### Input Tax Credit for VAT
**VAT Input Credit:**
- If you have purchased goods that are used for providing taxable services or for your business operations, you can claim input tax credit for the VAT paid on those goods.
- Ensure that the VAT invoices are in your name and contain all necessary details to substantiate the credit claim.
### Input Tax Credit for Excise Duty
**Excise Duty Input Credit:**
- Generally, input credit of excise duty is available for manufacturers or dealers who are involved in further production or sale of excisable goods.
- As a service provider, you would not typically claim excise duty input credit unless you are also dealing in the sale of excisable goods.
### Specific Considerations for Leasing Services
**Leasing Services and ITC:**
- For leasing services, the input credit mechanism can vary. If the leased goods involve the purchase of excisable goods, you might be eligible for input credit on those goods.
- However, leasing services primarily attract service tax (or GST, depending on the period and applicability), and the input credits would typically pertain to service tax/GST paid on input services and goods.
### Relevant Provisions and Conditions
**Under GST Regime (Post-July 2017):**
- Input tax credit under GST is available for the tax paid on inputs, capital goods, and input services used in the course of business.
- Ensure that the conditions for claiming ITC under Section 16 of the CGST Act are met, such as having a valid tax invoice and the goods/services being used for business purposes.
**Under Earlier VAT/Excise Regime:**
- If your transactions pertain to the pre-GST period, refer to the specific state VAT Act and the Central Excise Act for the rules on claiming input credit.
- Typically, VAT and excise duty credits cannot be cross-utilized unless specified by law.
### Action Steps
1. **Review Invoices:**
- Ensure that your purchase invoices are detailed, showing VAT and excise duty separately.
- Verify that the purchases are used for your taxable services/business operations.
2. **Consult Latest Provisions:**
- Check for any amendments or notifications under the GST law or respective state VAT laws that may impact your eligibility for input credits.
- Refer to Section 16 of the CGST Act and relevant state VAT Acts.
3. **Seek Professional Advice:**
- Given the complexity and potential changes in tax laws, consult a tax professional or GST consultant to ensure compliance and accurate credit claims.
### Conclusion
As a service provider dealing in leasing services with VAT registration, you can claim input tax credit for VAT on eligible purchases used for your business operations. However, claiming input credit for excise duty would depend on whether you are also involved in the sale of excisable goods. For precise guidance, especially considering the transition from VAT/excise to GST, consulting a tax professional is advisable.
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