Mvat credit

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This query is : Resolved

CA Mandar Joshi (Querist)

18 April 2013 Dear Experts,

A company in Kolkata has imported machinery and consigned it directly to its sister concern in Maharashtra and allowed to use it on lease. in this case, can the arrangement be done in this way to avail MVAT Credit to the sister concern:

the lease agreement shall be between Maharashtra company and the warehouse of Kokata company in Maharashtra. thereby, the warehouse, having sales tax number, shall charge MVAT on the lease rent of machine and the maharashtra co can use it as mvat credit.

please reply.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

23 April 2013 Mr M Joshi,
Paying lease rentals to the Kolkatta co amounts to purchase of capital goods,in instalments. The vat paid on such entals can be claimed as input tax credit,in the monthly returns.The Maharashtra warehouse of the Kolakatta co should also be registered under MVAT Act and declare receipt of these rentals in their returns.....mjk

CA Mandar Joshi

CA Mandar Joshi (Querist)

23 April 2013 what if the machinery has not been received in the Maharashtra warehouse? can they still do the said arrangement?

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

24 April 2013 If the machinery is not received,it means that no delivery of goods have taken place and no lease transaction is done. So,no question of availing the set off or even raising an invoice on lease rentals...mjk

CA Mandar Joshi

CA Mandar Joshi (Querist)

29 April 2013 I mean to say machinery not received in Warehouse, but received directly in the user company's factory