Vat Credit on Excise Purchase

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 April 2010 Do we can take credit of VAT if We Purchase Goods with Excise registered dealer who gives including exicse in bill not VAT ?

So how we can take credit or pls guide me what to do under VAT act ?

thanks in advance

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
Follow

21 April 2010 no

CA Gangadhar Mishra

CA Gangadhar Mishra (Expert)
Follow

21 April 2010 if vat paid to a excise registered dealer than credit can be taken by producing Tax Invoice within the same state.

Querist : Anonymous

Querist : Anonymous (Querist)

22 April 2010 producing tax invoice withing the same state ?
Pls expalin detail wise ?

thanks in advance

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

02 August 2025 Hey! Your question is about whether you can claim **VAT credit on purchases from an excise-registered dealer who issues a bill including excise but no VAT**.

---

### Key points:

1. **Excise Duty vs VAT:**

* **Excise duty** is a central tax levied on manufacture of goods (paid to Central Govt).
* **VAT** is a state tax levied on sale of goods within the state.
* These are separate taxes.

2. **Input Tax Credit under VAT Act:**

* You can claim **input tax credit (ITC) only on VAT actually paid** on purchases.
* If your purchase bill **includes excise duty but no VAT**, **you cannot claim VAT credit** because VAT was not paid.

3. **Dealer issuing bill including excise but no VAT:**

* The dealer might be a manufacturer paying excise but **not charging VAT separately** (maybe selling under CST or interstate sales).
* In that case, **you have no VAT tax invoice to claim credit against**.

4. **What you need for VAT credit:**

* A **valid VAT tax invoice** showing VAT charged.
* The dealer must be a **registered VAT dealer in your state**.
* The goods must be purchased **within the state** (intra-state supply).

---

### So, in your case:

| Scenario | VAT Credit Eligibility |
| ------------------------------------------------------------------- | ------------------------------------------------------ |
| Purchase from excise-registered dealer **with VAT charged** | Yes, if dealer is VAT registered and invoice shows VAT |
| Purchase from excise-registered dealer **with excise only, no VAT** | No VAT credit allowed |

---

### What to do?

* **Ask your supplier to provide a VAT invoice with VAT charged** if applicable.
* If they are only charging excise and no VAT, you **cannot claim VAT credit**.
* If the dealer is interstate (outside your state), purchase may be under CST, and VAT credit does not apply.
* Always ensure you receive a **proper VAT invoice** mentioning VAT amount and VAT registration number.

---

### Summary:

* VAT credit = VAT paid on intra-state purchase with valid VAT invoice.
* Excise duty paid does **not** qualify for VAT credit.
* No VAT on bill = no input tax credit.

---

If you want, I can help you draft a letter/email to your supplier requesting a proper VAT invoice or explain this to your accounts team.

Need that?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now