vat on capital goods

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Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2011 Dear all,

can vat on capital goods purchased be used for payment of vat on sales.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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27 January 2011 Input Tax Credit on capital goods will also be available for manufacturers and traders. Tax credit on capital goods may be adjusted over a maximum of 36 equal monthly instalments. The States may at their option reduce this number of instalments. There will be a negative list for capital goods (on the basis of principles already decided by the Empowered Committee) not eligible for input tax credit. Tax credit on capital goods will essentially be available for those capital goods, which are required for keeping the goods in saleable condition.