I want to know whether 100% VAT input credit on capital goods allowed under The Delhi VAT Act ?
While in audit of a client I found company had purchased furnitures in september 2010 and January 2011 on which they have taken input VAT credit of 2,60,000 (i.e. 100% VAT charged on invoice) in last quarter. Further some assets are transfered to Ludhiana for branch use.
My Observation On This- As per The Delhi VAT Act Section-9 (9) ITC on vat should be allowed in 3 insatllments. So one can take 1/3rd credit in one year. Further Section 9 (10) clause (3) it has been mentioned VAT in put will be reversed propertionately on Branch Transfer out of Delhi other than by way of sale.
Action To Be Taken- The Vat credit on branch transfered assets will be reversed 100%. For Assets used in delhi 2/3rd will be reversed.
Doubts-If my observation is right then-:
1-Whether the client has to revise his return after depositing balance VAT ?
2-What will be done on returns for assets purchased in 2nd Quarter ?
3-What is the rate of interest on late deposit of VAT
4-Wheter on assets purchased in F/Y 09-10 on which credit not taken can be taken(adjustment purpose) in F/Y 10/11
5- Whether VAT credit on Works Contaract for renovation and repairing works done in Show rooms of client can be taken.
(The said company is a trading company. It only imports cosmetic products and sells here in Delhi (H.O.). It has only One branch in ludhiana and sells on CST to other corporate clients all over INDIA)