Reduction in Vat Set-off

This query is : Resolved 

18 September 2007

As per Rule 53 of the MVAT Act,2005 input Vat Paid Will be reduced to the extent of 4% on purchase of Furniture And Fixtures,Electrical Installations,Office Equipments.

However my Question is:

1)What all includes as Office Equipments?
(Give some comprehensive list)

2)Do computers,fax machine, printers, safes,air conditioners,mobile sets,etc purchased for office use are to be termed as office equipments?

3)So,Vat paid @ 4% on computers purchased will not be available for Set-off?

4)Are there any amendments to this rule?

Dayal (Expert)
06 November 2007

Set off rules have been amended to allow Vat on Capital Assets, which earlier were under negative list such as
1. Furniture & Fixture
2. Electrical installation
3. Office Equipment

Vat Credit has now been allowed on Assets – “CAPITALISED” after reducing 4% VAT for the following

1. Furniture Fixture – 8.5%
2. Office Equipment – 8.5% (where Vat charged is 12.5% on such equipments)

Full Credit of Vat as under on Assets “CAPITALISED” for the following

1. Plant & Machinery – 12.5%
3. Electrical installation – 12.5%

Capital goods if capitalised such as Computers and electrical installation having a Vat Rate of 4% will not be eligible for VAT credit as reduction of 4% will render it “0”

All changes stand effective from 08/09/2006

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