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Disallowance itc under wb vat act 2003 for credit purchases?

saurav chhabra (BUSINESS) (114 Points)

09 June 2015

dear members,

We would like to know wether ITC can be disllaowed on purchases whose payments are due?

please also let us know if the seller and pruchaser adjust the amount by way of debits and credits and either of the party as per books make the balance payment , can the department disllaow ITC on the adjusted amount citing that since no payment was made the transfer of the right to use the goods does not come into play and hence ITC will be disllaowed.

please give your views supported by case laws.

regards..

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2 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 09 June 2015

As I understand, VAT input credit is not linked to payment made to vendors. I think it can be availed irrespective of the fact whether payment is made or not.

dhanamganesh@gmail.com (private service Accountant) (80 Points)
Replied 11 September 2015

sir,

we understand if it is a genuine transaction and we could able to provide all details including the movement of goods and transfer of rights on goods and in the invoice u collect the vat and paid the collected amount to the deparatment and prove that the purchases of goods are either for resale or to used in the manufacture even though the amout from drs for sale and crs for purchase accounts are adjusted.if both are with the same vat/cst registrations with in the regulations of act, assessing officer will not disallow the transaction. Please.

with regards

p.r.ganesh