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Reduction in Vat Set-off (VAT)

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This query is : Resolved

( Querist )
18 September 2007

As per Rule 53 of the MVAT Act,2005 input Vat Paid Will be reduced to the extent of 4% on purchase of Furniture And Fixtures,Electrical Installations,Office Equipments.

However my Question is:

1)What all includes as Office Equipments?
(Give some comprehensive list)

2)Do computers,fax machine, printers, safes,air conditioners,mobile sets,etc purchased for office use are to be termed as office equipments?

3)So,Vat paid @ 4% on computers purchased will not be available for Set-off?

4)Are there any amendments to this rule?


( Expert )
06 November 2007

Set off rules have been amended to allow Vat on Capital Assets, which earlier were under negative list such as
1. Furniture & Fixture
2. Electrical installation
3. Office Equipment

Vat Credit has now been allowed on Assets – “CAPITALISED” after reducing 4% VAT for the following

1. Furniture Fixture – 8.5%
2. Office Equipment – 8.5% (where Vat charged is 12.5% on such equipments)

Full Credit of Vat as under on Assets “CAPITALISED” for the following

1. Plant & Machinery – 12.5%
3. Electrical installation – 12.5%

Capital goods if capitalised such as Computers and electrical installation having a Vat Rate of 4% will not be eligible for VAT credit as reduction of 4% will render it “0”

All changes stand effective from 08/09/2006



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