setoff

This query is : Resolved

sunny (Querist)
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25 January 2010 my assessee is engaged in poha industries in bombay having no vat on purchases & sales.On some exps vat is to paid by client say Rs.25000
can i take the refund & how it to be shown in the audit report 704

CA Deepak P. Agrawal

CA Deepak P. Agrawal (Expert)
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26 January 2010 Your client is engaged in manuffacturing of tax free goods. Some corresponding taxble goods may be purchaed like packing material on which VAT is paid. You can take set off on such purchases after reducing 2%.
On capital asset full set off can be taken except building and office equipment.
For more detail study rule 53(2)and also read the def of corresponding taxable gooda as per rule 53
Regards