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Discussion > VAT >

input VAT on capital goods

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employee


[ Scorecard : 35]
Posted On 10 January 2009 at 14:15 Report Abuse

can input VAT can be claimed on capital good. can anybody plz advice......


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CA. Rajeev Aggarwal
Chartered Accountant


[ Scorecard : 3419]
Posted On 10 January 2009 at 15:17

Yes, but in 3 years

1/3 every year





CA Hemant T Dewani
Chartered Accountant


[ Scorecard : 3351]
Posted On 10 January 2009 at 15:39

input of vat taken immediatly if  capital goods is used for trading of manufacturing unit it is not cover under rule 54 fo the mvat act




Koneri Balaji
CHARTERED ACCOUNTANT


[ Scorecard : 101]
Posted On 10 January 2009 at 16:05

 Yes you can take input credit of capital goods but it should not fall under the negative list i.e. Schedule V




CA SUDHIR HALAKHANDI
PRACTICING CHARTERED ACCOUNTANT


[ Scorecard : 8386]
Posted On 11 January 2009 at 08:08

DEAR MEMBERS,

I HAVE WRITEEN ON THIS FORUM SO MANY TIMES THAT VAT IS A STATE SUBJECT HENCE THE QUESTION ON THE VAT CAN NOT BE ANSWERED AS THE QUESTIONS OF INCOME TAX AND SERVICE TAX ARE ANSWERED. 

LET US WE DEAL THIS QUESTION IN A PROFESSIONAL MANNER.

WHAT IS INPUT CREDIT ON CAPITAL GOODS:-

NOW FIRST OF ALL WE HAVE HAVE TO SEE WHAT IS CAPITAL GOODS? EACH LAW OF STATE HAS DEFINED IT IN IT'S OWN MANNER BUT THE MOST USED OF COMMON DEFINITION IS :-

"CAPITAL GOODS MEANS PLANT AND MACHINERY , PARTS AND ACCESSORIES THEREOF WHICH HAVE BEEN USED FOR MANUFACTURING OF GOODS."

WHAT IS INPUT CREDIT ON CAPITAL GOODS:-

THE VAT PAID WITHIN THE STATE IS THE INPUT CREDIT ON CAPITAL GOODS.

SEE HERE IN LOST OF THE STATES THE INPUT CREIDT ON CAPITAL GOODS IS AVIALABLE ON PLANT AND MACHINERY AND ACCESSORIES AND PARTS THEREOF HENCE YOU CAN BE SURE THAT "TRADERS" CAN NOT CLAIM THIS CREDIT.

TIME OF CLAIMING CREDIT:- HERE SEE THE CREDIT CAN ONLY BE CLAIMED AS PER VAT STATE LAWS. SEE SOME OF THE STATES HAVE MADE THE LAW TO GIVE IMMEDIATE CREDIT BUT IN MOST OF THE STATES THERE ARE RESTRICTIONS OF VARIOUS TYPES . SEE SOME OF EXMAPLES:-

1. THE CREDIT FOR CAPITAL GOODS HAVING VALUE UP TO RS. 1 LAKH CAN BE CLAIMED IMMEDITALY.

2. FOR CREDIT FOR MORE THAN RS.ONE LAC BILL CAN BE CLIAMED IN TWO INSTALLMENTS - FIRST IN SEPT AND SECOND IN MARCH.

3. THE INPUT CREDIT ON CAPITAL GOODS CAN BE CLAIMED IN 12 INSTALMETS MONTHLY.

HENCE GO FOR PARTICULAR STATE LAW AND DECIDE THE FATE OF INPUT CREDIT ON CAPITAL GOODS.

MY SUGGESTIONS TO  VAT QUESRIES:-

 1. SHOULD INFORM THIER STATE.

2. PLEASE CLARIFY THE PROBLEM IN BRIEF .

MY SUGGESTTIONS TO MEMBERS WHO ARE REPLYING:-

1. IF THE PROBLEM IS NOT OF YOUR STATE PLEASE DON'T TOUCH IT

2. ONLY THE CA/EXPERS WORKING IN THAT STATE SHOULD COME FORWARD AND TACKLE THE PROBLE.

(THE AUTHOR OF THIS REPLY IS A VAT EXPERS FROM RAJASTHAN HAVING WRITTEN A BOOKS ON VAT IN HIS OWN STATE AND CAN ANSWER GENERAL QUESTIONS ON VAT PLUS SPECFIC QUESTION ON VAT IN RAJASTHAN.

FURTHER THE AUTHOR HAS ALSO WIRTTEN ABOUT VAT IN THE FOLLOWING STATES :- DELHI, MAHARASTRA, KARNATAKA AND WEST BENGAL- IN CHARTERED ACCOUNTANTS PRACTICE JOUNAL, DELHI- VAT SPECIAL 2005 ALSO WRITTEN IN ICAI CA JOURNAL -VAT SPECIAL IN 2005 WHEN VAT WAS INTRODUCED IN COUNTRY.)

- MY SPECIAL REQUEST TO ALL THE MEMBERS:-

2 MARKS IS REPLY KE LIYE KAM RAHENGE , PLEASE REQUEST THE ADMIN TO GIVE ME AT LEAST 25 MARKS FOR THIS REPLY.

ALL THE CONCERNED SHOULD NOT TAKE THIS REPLY AS AN OFFENCE AND READ AND ACT IN TRUE SPIRIT AND SENTIMENTS IN WHICH THE REPLY IS GIVEN.

- CA SUDHIR HALAKHANDI



Total thanks : 5 times



Shudhanshu Agrawal
CA Final and CS Final


[ Scorecard : 2438]
Posted On 11 January 2009 at 17:04

I agree with Mr.Sudhir....please do mention the state for which u are asking this question .......but this question is different and in this VAT credit can we taken on capital goods...but i think no of years are 2 in case of VAT and 3 in case of excise in which credit can be taken

Do correct me if i am wrong.




CA SUDHIR HALAKHANDI
PRACTICING CHARTERED ACCOUNTANT


[ Scorecard : 8386]
Posted On 12 January 2009 at 09:36

Dear Shudhanshu ! Still you are mistaking . All the state VAT laws have different provisions regarding this. Here in Rajasthan it has to be taken in One year . In Maharashtra ... Hence you have to go to the state Law of a particular state. For central excise you may be right becasue i am not an expert of this subject. - Goods wishes and thanks for showing interest.


Total thanks : 1 times



Ameet
L


[ Scorecard : 1668]
Posted On 12 January 2009 at 15:19

In my opinion, Mr. Shudhanshu in excise there is 2 Yrs. & i clearly agree with Mr. Sudhir




VIPIN KUTUMBALE
TAX CONSULTANT


[ Scorecard : 323]
Posted On 29 January 2009 at 23:20

Originally posted by :Ameet

under excise,  first of all  we have to see whether the capital goods is elligible for CENVAT OR not, as per the CENVAT RULE  every fixed asset is not elligible for  CREDIT UNDER CENVAT,  and the cenvat should be used  50% in the financial year in which capital goods entered in the factory/ procured by the output service provider,  and remaining  50 %in the next year ,  at the same time , assessee should  not claimed depreciation on this amount under Income act

 

" In my opinion, Mr. Shudhanshu in excise there is 2 Yrs. & i clearly agree with Mr. Sudhir "


 




kailash
Accounts Manager


[ Scorecard : 24]
Posted On 25 August 2009 at 17:11

i clearly agree with Mr. Sudhir



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