Tax paid on interstate purchases

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This query is : Resolved

Shailaja.G.C

Shailaja.G.C (Querist)

24 December 2009 As per Act, we cannot setoff tax paid on Interstate purchases, instead we hav to add it to inventory value.
But during VAT audit we observed that one of our client has setoff the same against output tax payable. And he argues we can setoff CST paid on purchases against tax payable.

Note: The client is located in Bangalore,Karnataka

Pls clarify.

CA Chandra Kishore Bajpai

CA Chandra Kishore Bajpai (Expert)

25 December 2009 In karnataka , Tax paid on Inter state purchase cannot be claimed as ITC, as per section 10(2) input tax means the tax collected or payable UNDER THIS ACT (i.e. Karanatka VAT Act) thus tax paid on CST Act cannot be claimed as ITC

Vishnu Saboo

Vishnu Saboo (Expert)

25 December 2009 Dealer where ever can located, as per CST act there is no provision for input credit paid against purchases in course of interstate.
in 100% EOU, a dealer can claim for the refund of CST paid by him against his purchases, but cann't claim & set off the input credit.

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