Avaling input credit on trucks purchased under mvat act

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CA Sakina (Querist)
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18 November 2011 Dear Sir/Madam,

I would like to know whether a dealer engaged in undertaking works contract, paying tax at a composite rate of 5% under Mvat Act 2002 is allowed to claim full input credit on tempo purchased used for business purpose for transporting goods.The dealer has capitalized the said assets in its books.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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18 November 2011 Mr. Sakina,
No. This is not allowed. Under composition scheme no input credit is permitted. Even otherwise,vat paid on purchase vehicles for own use are given credit while paying output tax.
MJK

CA Sakina

CA Sakina (Querist)
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19 November 2011 But sir, under Mvat Act dealers are entitled to claim input after retention @3%
And these vehicles being vehicles in nature for transportation of goods,falls under delivery vehicles.

CA Sakina

CA Sakina (Querist)
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22 November 2011 I require clarification for above urgently....Can u please help me out

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