Eligibility of set off

This query is : Resolved

Ca Siddharth Mehta (Querist)
Follow

04 February 2012 A dealer is liable to file monthly returns, purchased a raw materials by paying
tax @5% & 12.5% in the month of December 2011 and used the same in the
manufacturing of product and the said manufactured product were sold in the
month of February 2012. The rate of tax on the manufactured product was
5% under schedule C.

Situation 1
However, from 1st February, 2012, the product manufactured became tax free
and was classified under schedule A. Whether set off is available on purchase
of the raw materials ? How much ?

Situation 2
However, from 1st February, 2012, the product manufactured became exempt
by Notification issued u/s 8 of MVAT Act. Whether set off is available on
purchase of raw materials ? How much ?

Under MVAT Act, 2002

Prakash Kochar

Prakash Kochar (Expert)
Follow

06 February 2012 Goods purchased and used in manufacturing before 31st January dealer will be entitle for setoff of full amount of input tax.
SITUATION 1- For the purchases used after 01-02 for mgf of tax free goods covered under sch A, under the circumstances setoff will be reduced @2% of purchase price of raw material.Rule 53(2)(a)
Situation 2 _ If the goods are not covered under shc. A, but are exempted from tax under notification issued u/s. 8 (Not tax free under Sch A)in such case setoff will be available for total input.

Ca Siddharth Mehta

Ca Siddharth Mehta (Querist)
Follow

06 February 2012 Thank you Prakash Kochar

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

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

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

Santosh Behera

KANHA ASSOCIATES

Smrity

Rajasekar

Rajesh

Subscribe Now

Eligibility of set off

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA