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Can Vat Credit Be taken For Expenses in Restaurant

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(Querist)
16 February 2010 Sir,

One of my client is a Menufacturer of Garments. He takes Vat credit of every bill raised to its name, for Eg. If he eats in a restaurant for the sake of Bussiness Promotion, and suppose the bill is for Rs. 1000 and the vat Element is Rs 120.. Then in his book he books the expense as ...
Sales Promotion A/C ... Dr. 1000
Vat input Tax A/C ......Dr. 120
To Cash / Bank 1120

Sir is this correct? Can he book like this...
Please reffer to some notification and Sections if possible..
thank You
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CA Vijay Kumar Gupta

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CA Vijay Kumar Gupta (Expert)
16 February 2010 No. He is claiming wrong input,because the restaurant exps. are not the input for manufacturing of garments. Moreover, it is normally under negative list under Vat Laws.
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