Vat input

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2016 whether excess VAT input 4% or 5% ( after adjusting VAT output of 4% & 5%) can be adjusted against 12.5% (after adjusting VAT input 12.5%) VAT output.

Expert : Anonymous

Expert : Anonymous (Expert)

12 September 2016 Dear User, For which state u r taking about.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

02 August 2025 Great question about VAT input credit adjustment across different VAT rates!

### To clarify:

* You have **input VAT at 4% or 5% rates** and you’ve adjusted it against output VAT at those same rates.
* Now, you want to know if **any excess input VAT at 4% or 5% can be adjusted against output VAT at 12.5% (after adjusting input VAT at 12.5%)**.

---

### General principle under VAT laws:

* **Input VAT credit can be adjusted only against output VAT of the *same rate slab*.**
* Different VAT rates correspond to different categories of goods/services, and credit cannot be cross-adjusted between different rates.
* So, **excess input VAT at 4% or 5% cannot be used to offset output VAT at 12.5%.**

---

### What you can do:

* Adjust input VAT only against output VAT of the **same rate**.
* If excess input credit remains unused at a lower rate, it can generally be carried forward or claimed as refund (subject to state VAT laws and procedures).
* Excess input credit from one rate slab is not transferable to offset output tax liabilities at another rate slab.

---

### Summary:

| Input VAT Rate | Can Adjust Against Output VAT Rate? |
| -------------- | ----------------------------------- |
| 4% or 5% | Only against output VAT at 4% or 5% |
| 12.5% | Only against output VAT at 12.5% |

---

If you want, I can also help with the exact rules for your state or how to file returns with these multiple rates.

Would that be helpful?

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