Cst credit against input vat

This query is : Resolved

kiran g panchal (Querist)
Follow

24 December 2013 my query is that i sold goods to another state .then i chagre 5% cst and i purchase materials for own state,shuold i take vat input credit agaist cst payable ?

kiran g panchal

kiran g panchal (Querist)
Follow

10 June 2017 diff.between sgst,cgst.igst suggest me

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

20 July 2024 Under the earlier Central Sales Tax (CST) regime, businesses were not allowed to take Input Tax Credit (ITC) of Value Added Tax (VAT) against CST payable. CST was a separate tax levied on inter-state sales, whereas VAT was levied on intra-state sales and purchases.

Here’s how it worked:

1. **CST on Inter-State Sales:** When you sold goods to another state, you charged CST. CST was payable to the Central Government.

2. **VAT on Intra-State Purchases:** When you purchased goods within your own state (intra-state purchases), you paid VAT. VAT was payable to the State Government.

3. **No ITC of VAT against CST:** You could not set off or claim Input Tax Credit (ITC) of VAT paid on your intra-state purchases against the CST payable on your inter-state sales. These were separate taxes administered by different authorities.

Since the implementation of GST (Goods and Services Tax), which has replaced CST and VAT, the concept of ITC has been unified across intra-state and inter-state transactions. Now, businesses can claim Input Tax Credit (ITC) for GST paid on purchases against GST collected on sales, irrespective of whether the transactions are intra-state or inter-state.

Therefore, under GST, if you sell goods to another state (inter-state sale) and charge Integrated GST (IGST), you can claim ITC of IGST paid on your purchases (whether intra-state or inter-state) against the IGST collected on your sales.

For specific guidance on GST and its implications for your business, including the transitional provisions from CST/VAT to GST, it’s recommended to consult with a qualified GST professional or tax advisor who can provide personalized advice based on your business operations and transactions.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

manojkumarkk

rajkumar yadav

C G K MURTHY

CA.Gopal Rathi

MAHESHA RAMANNA

Subscribe Now

Cst credit against input vat

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Accountant

CA Final

GST CONSULTANCY

Manager- Finance and Compliance

Article Assistant

GST CONSULTANT