Regarding set off
This query is : Resolved
03 December 2013
can set off of VAT can be taken when in a bill VAT as well as Service tax both are charged.
reply awaited! urgently!
reply awaited! urgently!
05 December 2013
credit of both can taken subject to satisfaction of conditions in relevant provisions
Message likes :
1 times
06 January 2014
can u please specify which are those condtions?
20 July 2025
Sure! Here’s a clear explanation regarding set off of VAT when both VAT and Service Tax are charged on the same bill:
Can VAT input credit be taken when a bill charges both VAT and Service Tax?
Yes, input VAT credit can be taken on the VAT portion, subject to conditions.
Important points & conditions:
VAT and Service Tax are separate taxes governed by different laws:
VAT: State VAT Act
Service Tax: Central Excise / Finance Act
Input VAT credit can be claimed only on VAT paid on inputs or input services used in the course of business, as per the VAT law of the state.
Service Tax is not allowed as input credit against VAT and vice versa because they are different taxes.
To claim VAT input credit:
The VAT must be clearly indicated on the tax invoice.
The goods or services on which VAT is charged must be eligible inputs under VAT law.
The purchaser must be registered under VAT and comply with all VAT rules.
The invoice must be proper and conform to VAT rules.
Service Tax paid cannot be set off against VAT liability, but input service credit for service tax can be claimed under service tax rules separately.
Summary:
You can take VAT input credit on VAT charged in the bill if conditions are met.
You cannot take credit of Service Tax against VAT, nor can you set off VAT against service tax.
Each tax’s input credit must be claimed separately under its own law.
Can VAT input credit be taken when a bill charges both VAT and Service Tax?
Yes, input VAT credit can be taken on the VAT portion, subject to conditions.
Important points & conditions:
VAT and Service Tax are separate taxes governed by different laws:
VAT: State VAT Act
Service Tax: Central Excise / Finance Act
Input VAT credit can be claimed only on VAT paid on inputs or input services used in the course of business, as per the VAT law of the state.
Service Tax is not allowed as input credit against VAT and vice versa because they are different taxes.
To claim VAT input credit:
The VAT must be clearly indicated on the tax invoice.
The goods or services on which VAT is charged must be eligible inputs under VAT law.
The purchaser must be registered under VAT and comply with all VAT rules.
The invoice must be proper and conform to VAT rules.
Service Tax paid cannot be set off against VAT liability, but input service credit for service tax can be claimed under service tax rules separately.
Summary:
You can take VAT input credit on VAT charged in the bill if conditions are met.
You cannot take credit of Service Tax against VAT, nor can you set off VAT against service tax.
Each tax’s input credit must be claimed separately under its own law.
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