Cst and vat purchases

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Our's is a newly established company of sugar industry in Karnataka. There is no VAT on the commodity 'sugar' in Karnataka. So, there is no concept of input VAT credit even on local purchases with KVAT. We make cash purchases from Hyderabad(A.P) and bring the material to our factory in Karnataka in our own transportation. While making the purchase the seller is raising tax inoice in the name and address of the factory with the local VAT rate whichever is applicable and not with the CST. Here the question raises is how to show this value of VAT tax in the books of accounts while booking the purchase. It can neither be treated like KVAT nor like CST since the invoice is from A.P. with the local VAT rate. And where to show the same in VAT return. Kindly clarify.
Replies (1)

The tax rate applies on the basis of place of delivery. So., if your goods are delivered at Hyderabad (A.P) by any A.P. dealer, so that dealer is correctly charging VAT on it and not CST.

 

 

Moreover., to claim ITC on the same VAT, you need to get registration in AP as well.., as you already got a storage/warehouse there..


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