07 December 2007
Suppose we have collected CST at the time of O.G.S.. Whether this can be claimed as a Credeit against Input VAT? What could be the consequencies if reverse situation? Can CST collected can be claimed as a Set off against CST paid?
09 December 2007
There are two situations:- 01. You are paying CST at for purchasing in course of inter state trade & commerce. 02. You are collecting CST on sales in cousre of inter state trade & commerce.
Your questions are as follows:-
a) Whether CST paid by you (sl. 01 above)can be adjusted against VAT output or CST Payable? Answer:- No
b) Whether CST collected by you (sl. no. 02 above)can be adjusted against CST Paid (Sl. no. 01)? Answer:- No
c) Whether CST collected by you (sl. no. 02 above)can be adjusted against VAT ITC?
Answer:- Answer may differ from State to State. In Assam it is permissible.
As per the law, CST is a non adjustable tax. You are not allowed to set off CST against VAT under any circumstances. The concept of set off input against output applies only to VAT and not on CST. Further input CST cannot be adjusted against output CST.
For your updation, I would like to quote following two sections from Assam Value Added Tax Act, 2003 regarding adjustment of excess VAT ITC against CST Liability. Section 15 Input tax credit exceeding tax liability.-
(1) If the input tax credit of a registered dealer other than an exporter selling goods outside the territory of India determined under this Act for a period exceeds the tax liability for that period, the excess credit shall be set off against any outstanding tax, penalty or f under this Act. (2) The excess input tax credit after adjustment under sub-section (1) may be carried over as an input tax credit to the subsequent period or periods. Provided that if a registered dealer has an excess tax credit for twenty four consecutive months, he shall make an application for refund of such unadjusted input tax credit and the Prescribed Authority shall ordinarily refund him the excess credit within three months of the receipt of the application.”
Comment:- [Proviso has inserted by Assam Act No. XIII of 2005 brought in to force from 01.05.2005 vide Government Notification No. FTX.55/2005/2 dated 28th April, 2005.
(3) In case where input tax credit is carried forward, a quarterly credit statement may be forwarded to the dealer concerned and the claims be reconciled accordingly.
Section-16 Tax payable.-
(1) The net tax payable by a registered dealer for a tax period shall be the difference between the output tax plus purchase tax, if any, and the input tax, which can be determined by the following formula: Net tax payable = (O+P)- I where ‘O’ denotes the output tax payable for any tax period as determined under section 10, ‘P’ denotes the purchase tax paid by a registered dealer for any tax period as determined under section 12 and ‘I’ denotes the input tax paid or payable for the said tax period as determined under section 14. (2) The net tax payable by a dealer liable to pay tax, but not registered under this Act, for a tax period, shall be equal to the output tax payable for the said tax period as determined under section 10. (3) If the amount calculated under sub-section (1) is a negative quantum,— (a) the same shall be adjusted at the option of the dealer against the tax liability, if any, of the dealer under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) for the said tax period and only the remaining amount of the Central Sales Tax shall be payable; or (b) any amount of credit remaining after such adjustment shall be carried forward to the next tax period.
I hope you will give your comment and enlighten me.
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