Can i take set off in vat against cst

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2014 Dear Sir/Madam,

I am a trader in Maharashtra. I buy goods from the local manufacturors with a VAT of 5%. I sell the goods at Gujrat on that I have to pay CST @2%. Overall Taxes are now increased i. e. 5+2=7%.

My query is that, can I take a set off in VAT of 5% against the CST of 2%.

Please suggest me on that.

And also suggest any other way to reduce such taxes.

Regards --
CS Gaurav Mishra

C.A. Mayur J. Raiyani

C.A. Mayur J. Raiyani (Expert)
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09 April 2014 you can sett off your CST liability against VAT receivable. As you are collecting CST from Gujarat Purchaser and depositing the same with central government. As you have VAT receivable amount, you can set off CST payable to the extent VAT receivable.

Querist : Anonymous

Querist : Anonymous (Querist)

14 April 2014 Thank You So much for your important assistence.

Santosh Kalburgi

Santosh Kalburgi (Expert)
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23 April 2014 Hello,

Mr Mayur. The VAT input credit cannot be used to set off CST liability. VAT input can only be utilised if goods sold within the state. Also CST is not paid to the central Govt though it is called as central sales tax. It is paid to state commercial tax Dept itself.
Hence in the current case, the VAT input will have to be reversed to the extent of such interstate sale.
Regards,
Santosh G Kalburgi
Cost Accountant
9742022309

C.A. Mayur J. Raiyani

C.A. Mayur J. Raiyani (Expert)
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30 April 2014 Dear Sir,
if one has excess Input VAT balance i.e. excess of input VAT over output VAT, then excess balance can be used in paying CST liability.
Mathematically,
Input VAT (Local Tax on purchase..........XXX
Less : Output VAT (Local tax on sales....(xxx)
Balance________________________________XXX
Less : CST (Tax on central Sales.........(xxx)
Balance Input VAT credit_______________XXX

However, if you have sort balance of input vat credit then remaining CST is payable.

C.A. Mayur J. Raiyani

C.A. Mayur J. Raiyani (Expert)
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30 April 2014 Dear Santosh Sir, you can refer example cited on Page 8.3, i am providing link
https://www.icai.org/resource_file/18948sm_finalnew_idtl_service_cp8.pdf

Please, inform me about your stand with any rules and regulation.

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