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.
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
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.
CAclubindia
