Cst credit against input vat
This query is : Resolved
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 ?
10 June 2017
diff.between sgst,cgst.igst suggest me
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.
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.
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