Vat input against cst sez sale

This query is : Resolved

Parag Patil (Querist)
Follow

04 October 2011 Please tell me can we use the Vat input Against CST SEZ sale.

for Delhi, Bangalore, Maharashtra, Hydrabad,Chennai,

ACMA Obulirajan R

ACMA Obulirajan R (Expert)
Follow

04 October 2011 You cannot take Vat input for cst sez sale and also for normal cst sale..

Vat input is available only for the local sale.

ACMA Obulirajan R

ACMA Obulirajan R (Expert)
Follow

04 October 2011 You cannot take vat input for cst sale.

Vat input is available only for the local sales.

Parag Patil

Parag Patil (Querist)
Follow

05 October 2011 Hi friend
I am not satisfy

i think we can utilised Vat input against cst sale and my question is abaout cst sez sale for the following sate

if there is any ristriction about cst sale then please sate cleary for the following

Delhi, Bangalore, Maharashtra, Hydrabad,Chennai

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

02 August 2025 Got it! You want clarity on whether **VAT input credit can be utilized against CST liability on SEZ sales**, specifically for these states: **Delhi, Bangalore (Karnataka), Maharashtra, Hyderabad (Telangana/Andhra Pradesh), and Chennai (Tamil Nadu).**

---

### General Principle:

* **VAT input credit** is allowed **only to set off VAT liability** on local sales within the same state.
* **CST (Central Sales Tax)** is a tax on inter-state sales, collected by the central government.
* **Typically, VAT input credit cannot be used to adjust CST liability**, as VAT and CST are different taxes under different jurisdictions.
* **SEZ sales are zero-rated under GST but under VAT/CST regime, SEZ sales were treated differently.**

---

### State-wise Brief:

| State | VAT Input Credit Against CST (including SEZ sales) |
| ---------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------ |
| **Delhi** | VAT input credit **cannot be adjusted against CST** liability. SEZ sales treated as interstate sales, so CST applies but VAT credit cannot offset CST. |
| **Karnataka** | Same principle: VAT input credit **cannot be used against CST**. SEZ sales attract CST, so no VAT credit adjustment. |
| **Maharashtra** | VAT input credit **cannot be used to offset CST** on SEZ or other interstate sales. SEZ sales are interstate, so CST applicable separately. |
| **Telangana/Andhra Pradesh (Hyderabad)** | VAT input credit cannot be adjusted against CST liability, including SEZ sales. |
| **Tamil Nadu (Chennai)** | VAT input credit only for VAT liability. CST on SEZ/interstate sales cannot be adjusted against VAT input credit. |

---

### Important Notes:

* **Input VAT credit can be claimed only against VAT liability** on intra-state sales.
* For **interstate sales including SEZ sales**, CST is applicable but **input VAT credit cannot be used to reduce CST liability**.
* SEZ sales are usually zero-rated under GST regime, but under old VAT/CST system, treated as interstate sales attracting CST.
* Some states might allow refund of VAT credit on inputs used for making interstate sales (including SEZ), but this is a refund, **not an adjustment against CST liability**.
* Always consult the respective state VAT Act or circulars for specific clarifications.

---

If you want, I can help you get the specific relevant notifications or circulars for any one of these states. Would you like me to do that?

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