VAT on Capital Goods

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ANSHUL GOYAL (Querist)
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11 July 2007 what is the Gujarat Govt. Policy on aviling the VAT Credit on Capital Goods. Is it in with consonence of Guidance Note of ICAI i.e. to amortise over a period of 36 EMIs.

Shashi Mohan Jha

Shashi Mohan Jha (Expert)
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12 July 2007 Yes. Input tax credit will be admissible for capital goods used in the manufacture of taxable goods. Capital goods must be used continuously for a full period of five years within the State. How ever, no input tax credit would be admissible for capital goods purchased for the use in:
a) Manufacture of tax-free goods
b)Generation of electricity including captive power
c) Works contract