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set off of VAT

Chartered Accountant


A client is following the set off as follows :-

Sales Rs. 10,00,000/- Add: WCT at 8 %  = 80,000/- total sales invoice Rs. 10,80,000/-

Purchases Rs. 4,00,000 plus 4 % vat  = 16000 = 4,16,000/-, Purchases Rs. 2,00,000 plus 12.5 vat  = 25000 = 225000/-

he pays vat as RS. ( 80000- 64%(16000+25000)) = 26240/- = 53760/-

Is this system correct, please reply

CA Rajesh Poddar

Hello: 9820989383

 

 
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Chartered Accountant


this is under which VAT act.

normally where in a works contract there is a composition scheme, the set off is not allowed.

where there is no composite vat rate and it is specifically on each material then the set off is allowed.

clear details required

 

 
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Practising Chartered Accountant

Of course, in one State i.e., Maharashtra, set-off is available with certain restrictions, even the dealer in composition.

 
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Chartered Accountant


Originally posted by :C V SURYAM
" Of course, in one State i.e., Maharashtra, set-off is available with certain restrictions, even the dealer in composition. "


 

This query pertains to MVAT

 
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Hi Rajesh,

In case of Works Contract wherein 8% tax is collected on sales, only 16/25 i.e. 64% of total input VAT credit is available. Hence what your client is doing is right. What is the exact nature of services he is providing? Is he doing repairs maintenance job or what??

 
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Originally posted by :Rajesh Poddar
" A client is following the set off as follows :-
Sales Rs. 10,00,000/- Add: WCT at 8 %  = 80,000/- total sales invoice Rs. 10,80,000/-
Purchases Rs. 4,00,000 plus 4 % vat  = 16000 = 4,16,000/-, Purchases Rs. 2,00,000 plus 12.5 vat  = 25000 = 225000/-
he pays vat as RS. ( 80000- 64%(16000+25000)) = 26240/- = 53760/-
Is this system correct, please reply
CA Rajesh Poddar
Hello: 9820989383
 
"

Hi Rajesh
 

When dealer is opting for composition scheme then his total Input Credit ( setoff)  is reduced by 36%  your clients is reducing his set off by 36% which is right.

The system followed by your clients is correct.

When dealer is not opting for composition scheme he is eligible for 100% set off 

 

Regards

Vivek 

 (9833976187)

 

 
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Chartered Accountant


Pls solve my following query

1. Can Composition dealer show tax (vat) in his invoice?

2. Can anyone take the set off, on the invoice of dealer (caterer)  who is in Composition Scheme?

Pls give the Reference [i.e Rule Number / Section (if any) of the same]

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kavith_thakkar @ yahoo.com

 
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A client is following the set off as follows :- Sales Rs. 10,00,000/- Add: WCT at 8 %  = 80,000/- total sales invoice Rs. 10,80,000/- Purchases Rs. 4,00,000 plus 4 % vat  = 16000 = 4,16,000/-, Purchases Rs. 2,00,000 plus 12.5 vat  = 25000 = 225000/- he pays vat as RS. ( 80000- 64%(16000+25000)) = 26240/- = 53760/- Is this system correct, please reply CA Rajesh Poddar Hello: 9820989383

 

Hi, 

 

in the above situation , i need a clarification that how did the client reached to 64%? 
Read more at: http://www.caclubindia.com/forum/set-off-of-vat-14999.asp#.UMnAvuRthEQ

 
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