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)
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21 April 2010 no

CA Gangadhar Mishra

CA Gangadhar Mishra (Expert)
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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)
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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**.

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### 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).

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### 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 |

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### 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.

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### 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.

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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.

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