Vat claim regd

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2013 sir I am a registered dealer in T.Nadu, I purchase goods within state from unregistered dealers/individual(used items) and pay TNVAT on purchase. I want to know whether can I adjust the same against vat payable on sales made within state and interstate.

Bipin Kumar Agarwal

Bipin Kumar Agarwal (Expert)

12 October 2013 Input Tax credit can not be adjustable against output Tax payble

Querist : Anonymous

Querist : Anonymous (Querist)

14 October 2013 sir, i heard that tax paid on purchases(purchase tax/goods bought from unregistered dealers local)can be adjusted against output tax within state. but cannot be adjusted against cst sales. pl clarify(give me under which section it cannot be claimed especially within state if possible.)

Querist : Anonymous

Querist : Anonymous (Querist)

19 October 2013 can we adjust vat input paid on purchase tax local. against vat output

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

02 August 2025 Hey! Let’s clarify this for your VAT claim situation in Tamil Nadu.

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### Your scenario:

* You’re a **registered dealer in Tamil Nadu**.
* You buy goods **within Tamil Nadu from unregistered dealers or individuals** (like used items).
* You pay **TNVAT (purchase tax)** on these purchases.
* You want to know if you can **adjust this purchase tax against VAT payable on your sales** — both within Tamil Nadu and interstate.

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### Key points:

#### 1. **Purchase tax (tax paid on goods purchased from unregistered dealers within the state):**

* This is called **Purchase Tax** or **Composition Tax** paid on purchases from unregistered dealers.
* Under Tamil Nadu VAT rules, **purchase tax paid on such purchases can be claimed as input tax credit**.
* But it can **only be adjusted against VAT payable on sales within Tamil Nadu** (intra-state sales).
* It **cannot be adjusted against CST payable on interstate sales**.

#### 2. **Input Tax Credit on Purchase Tax:**

* As per **Tamil Nadu VAT Act, Section 5(1A)** and related rules:

* You can claim input tax credit for purchase tax paid on goods bought from unregistered dealers.
* This credit is available only **against output VAT on local sales**, not CST on interstate sales.

#### 3. **Interstate sales and CST:**

* CST (Central Sales Tax) is applicable on interstate sales.
* Input tax credit on purchase tax **cannot be adjusted against CST liability**.
* CST law does not recognize input credit of state purchase tax.

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### Summary table:

| Purchase Tax on Unregistered Dealers | Adjusted Against VAT on Local Sales | Adjusted Against CST on Interstate Sales |
| ------------------------------------ | ----------------------------------- | ---------------------------------------- |
| Yes | Yes | No |

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### Reference:

* **Tamil Nadu Value Added Tax Act, 2006 — Section 5(1A)** on purchase tax.
* CST Act and VAT laws clarify no input credit for CST.

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### So:

* You **can adjust the purchase tax paid on goods bought locally from unregistered dealers against your VAT payable on local sales in Tamil Nadu**.
* But **you cannot use that purchase tax credit against CST payable on interstate sales**.

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If you want, I can help you draft a sample calculation or help you find the exact legal text for your records.

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