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Input Vat

radhakrishna (services) (79 Points)

28 August 2009

Company have purchase a Car for Rs. 700000 (including 4% Vat which comes to 26000/-)

how to adjust this 4% Input Vat

pls tell me asap

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9 Replies

CA. Shwetank Vats (Chartered Accountant) (653 Points)
Replied 28 August 2009

Input Tax Credit taken on raw material, consumable, packing use in manufacturing and assest which direct related to production.

as per my view ITC can't claim on car

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CA. Anoop Gadia (CA MBA (Finance) B.Com) (1717 Points)
Replied 30 August 2009

VAT means Value added tax which means it is taxed on incresed value of your treading goods so if company purshased car for resale than VAT can be allowed but it is buy for compay use than VAT addes to its value and company take dep. on Original + Vat value.

HARSH GOENKA (MANAGER ACCOUNTS) (268 Points)
Replied 31 August 2009

THE INPUT VAT HERE IS ON CAPITAL GOODS AND CREDIT CAN ONLY BE TAKEN ON MATERIAL CONSUMABLE AND PACKING

THEREFORE INPUT VAT ON CAR COULD NOT BE ADJUSTED WITH OUTPUT. INSTEAD U CAN ADD IT TO VALUE OF CAPITAL GOOD I.E. THE VALUE OF CAR TO BE BOOKED IN ACCOUNTS SHOULD BE Rs. 700000/-

BeyondConsultants (CA/CS/LLB(DU)) (184 Points)
Replied 01 September 2009

CAR is not treated as capital asset eligible for VAT except in the case of CAR dealers.

So suggest you to capitalize VAT credit in the books along with cost.

Regards

Nikhil

beyondconsultants @ ymail.com

9891950868

subramanya (Professional) (907 Points)
Replied 01 September 2009

Originally posted by :radhakrishna
"	Company have purchase a Car for Rs. 700000 (including 4% Vat which comes to 26000/-) how to adjust this 4% Input Vat pls tell me asap	"

Hi Radhakrishna,

Generally Input tax paid on Motor vehicles cannot be claimed as Input tax credit.

Hence the same should be considred as cost

With regards,

Subramanya

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V RENGARAJAN (FINANCE EXECUTIVE) (21 Points)
Replied 17 December 2010

SIR , OUR COMPANY NOW PURCHASED NEW MOTOR VEHCILE FOR GOODS CARRIER OF OUR MANUFACTURED PRODUCTS, SO THAT VAT CREDIT OF THE VEHCILE CAN BE TAKEN AS A CAPITAL GOODS OR NOT TO BE CLAIMED

Regards,

V.RENGARAJAN

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 17 December 2010

Originally posted by : V RENGARAJAN
	SIR , OUR COMPANY NOW PURCHASED NEW MOTOR VEHCILE FOR GOODS CARRIER OF OUR MANUFACTURED PRODUCTS, SO THAT VAT CREDIT OF THE VEHCILE CAN BE TAKEN AS A CAPITAL GOODS OR NOT TO BE CLAIMED Regards, V.RENGARAJAN

even the car is used for delivery of manufactured goods, input credit is not available, coz the invoice value is at factory gate, and it does not allow transportation charges to be included,

if you can confirm that this is a special type of car , not available in market for general transportation, and mandatory for delivery of our self products delivery ( like freezer vans) then only the same can be claimed.

the car for goods delivery is optional and its not mandatory for invoice value assessment, so the inpout credit may not be allowed,
views of others are welcome!!

Nitesh Kumar (Consultant) (42 Points)
Replied 18 December 2010

Input tax credit on capital goods also be available for traders and manufacturers. Tax credit on capital goods may be adjusted over a maximum of 36 equal monthly installments.The states may at their option reduce this number of installments. There is a negative list for capital goods(on the basis of principal already decided by the empowered committee) not ligible for input tax credit. In DVAT input can be taken in three equal annual installments.

Regards

Nitesh Kumar

AJAY PATYAL (PRACTICE) (24 Points)
Replied 18 March 2011

INPUT TAX CREDIT WILL RECIVED IN VAT BUT THERE LIST OF CAPITAL GODDS LIKE BUILDING MATIRAL, PLANT & MACHINERY AND OTHER THAT IS SHOWN IN THE LIST IS GIVEN THE ITC CREDIT ONLY.

AND BASIC THINK IS THAT ITC IS NOT CLAIMED IN A PARTICULAR YEAR BECOUSE IT IS CREDITED 1/3 TO ALL THREE YEAR...