XYZ Pvt. Ltd. purchased office furniture for Rs. 85000. It paid Vat @ 12.5% of Rs. 10,625 on above. My question is that can the company apart from claiming normal depriciation avail the VAT credit also. If Yes, on what amount it can and on what amount it can claim normal depriciaion. If no ,than on what amount will the depriciation is allowed for books and as well as tax purposes?
21 Replies
Sandeep Pandey
(CA FINAL)
(1306 Points)
Replied 16 December 2009
Company can not take VAT credit......................the company can claim depreciation on 95625 i.e.(85000+10625).
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 16 December 2009
agreed with sandeep..
Vinay Kumar Bansal
(CA FINAL Student)
(500 Points)
Replied 17 December 2009
Compnay can not claim Vat credit.
Depreciation is charged on full amount ie including vat
Ajay kumar
(assistant)
(481 Points)
Replied 17 December 2009
yes company cannot claim vat credit . It can only claim depreciation on capital goods including vat amount as per Income varient of vat which is followed in india.
Ajay kumar
(assistant)
(481 Points)
Replied 17 December 2009
yes company cannot claim vat credit . It can only claim depreciation on capital goods including vat amount as per income varient of vat which is followed in india.
Shikha Bajaj
(CA )
(433 Points)
Replied 17 December 2009
Pls anyone explain why can't we claim Vat credit in case of furniture & fixture? If possible, pls give relevant reference of Sec or rules.
Thanks
Shikha
NARENDER PAWAR
(CA final Student)
(337 Points)
Replied 17 December 2009
compnay can not take cenvat credit of vat. dep. is allowed on rs. 95625
CA Parth Shah
(Chartered Accountant)
(369 Points)
Replied 17 December 2009
| Originally posted by : ashish | ||
 |
yes company cannot claim vat credit . It can only claim depreciation on capital goods including vat amount as per Invoice method of vat which is followed in india. |  |
Agree...
VIGNESH
(Manager Finance &Accounts)
(327 Points)
Replied 17 December 2009
Depriciation shold be provided @ 10% for 95625, since furniture is not put in to use for the production purpose and it is used for the administration/ Office activity the VAT cannot be taken as input credit.
AMIT KUMAR
(PARTNER)
(32 Points)
Replied 17 December 2009
According to me company can claim VAT, But at the time of sale, even as scrap then it has to deposit VAT on the same.
Robin Kumar Gupta
(profession)
(179 Points)
Replied 17 December 2009
One cannot not avail dual benefit of claiming VAT Credit as well as claiming depriciation on purchase value (incl vat)
Hence the company cannot claim vat credit. It can claim only depriciation now.
Indu
(Articled Clerk)
(104 Points)
Replied 17 December 2009
but according to business law we used to handover under offical gazzette
in ur case its liable
Indu
(Articled Clerk)
(104 Points)
Replied 17 December 2009
yeah company cannot get vat credit it is fully depreciated
RICKY
(ACA AICWA CS (Executive Program))
(123 Points)
Replied 17 December 2009
Definition of Capital goods as per Tamilnadu VAT Act is
plant, machinery, equipment, apparatus, tools, appliances or electrical installation for producing, making, extracting or processing of any goods or for extracting or for bringing about any change in any substance for the manufacture of final products; (b) pollution control, quality control, laboratory and cold storage equipments; (c) components, spare parts and accessories of the goods specified in (a) and (b) above; (d) moulds, dies, jigs and fixtures; (e
) In the above definition office Furniture was not included, So Company can not avail the benefit of input VAT Credit on Furniture.
(f) storage tanks; and
(g) tubes, pipes and fittings thereof
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