Can we set off the VAT input on capital goods purchased for the business requirements. eg VAT on purchase of construction material for constructing Building which will be used as super market.
12 Replies
S.P.Mahanta
(Internal Auditor)
(647 Points)
Replied 06 June 2008
VAT on capital goods, eg. steel cement ,angle bar, round etc is not available as input credit under existing VAT rules. This view has been upheld in many cases.
(Guest)
Plz let me know where,how & when ,we can claim vat set off of capital goods purchase under delhi vat . please mail us -prakashmishraa @ yahoo.com
Sanjeev Kumar
(Private)
(895 Points)
Replied 02 July 2008
a lot on confusion on ITC on capital goods! but, it's not a matter for confusion because as VAT is concern_capital goods are entitled for ITC if that capital goods directly or indirectly related with business for taxable items. ITC on capital goods like purchase against (C) concessional benefit of tax. you should have to prove that there is no revenue loss and that particular capital good is not listed as Non- creditable good
balaji
(Student)
(26 Points)
Replied 19 December 2008
can anybody quote the case law which prohibits taking VAT credit on purchase of capital material like cement under tamil nadu VAT act
dharam
(Chartered accountant)
(24 Points)
Replied 11 May 2009
Dear Members,
I am C.A. Dharam Singh I want to show my querry to you regarding input credit of capital goods . It is urgent.
1. Company repair machinery and other equipments, then company take input credit of capital parts used during the repairing.
Pl tell me it is wrong policy or right policy.
Thanks with regards
C.A. Dharam Singh
R B Banwat
(tax consultant)
(154 Points)
Replied 14 May 2009
1. Lets understand first that under VAT regime whatever input tax is paid on purchases including capital assets purchases and also vat on expenses inucrred are entitled for VAT setoff , which can be adjusted agaisnt VAT Payable.
2. VAT on capital assests purchases are subject to provisions of rules of respecitve states. In maharashtra state purchases which are used to erect , construct immovabale goods, no set off is avaliable. At the same time Capital assets like office equipment, furniture and fixture, elecrrical installation etc, dealer is entitled for VAT paid on it subject to retention of 3%
3. if dealer manufacturer only tax free goods, then treatement of capital goods vat input have different treatment.
4. Please state specific querry and state , then one can answer specifically
thats all for the pen right now
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