Vat Input credit
This query is : Resolved
15 May 2009
Hi,
Plz let me know that can a Leather Manufacturing company having Factory at ground floor & office at first floor take VAT input credit during following purchases:
a)Vat paid on Purchase of steel & iron for consturction of factory.
b) Vat paid on purchase of cement & other building material for construction.
c) Vat paid on purchase of Air Conditioner for Factory/Office.
d) Vat paid on purchase of wood & plywood for construction of Almirah in the office.
Thanks in advance.
Plz let me know that can a Leather Manufacturing company having Factory at ground floor & office at first floor take VAT input credit during following purchases:
a)Vat paid on Purchase of steel & iron for consturction of factory.
b) Vat paid on purchase of cement & other building material for construction.
c) Vat paid on purchase of Air Conditioner for Factory/Office.
d) Vat paid on purchase of wood & plywood for construction of Almirah in the office.
Thanks in advance.
15 May 2009
Under Delhi Value Added Tax Act you can claim input credit for capital items in 3 years i.e 1/3rd each year.
15 May 2009
Thanks Parvin.But i still have some doubt:
a) Will input credit be claimed for all such fixed assets purchased by company?
b) Is the treatment same under Haryana Vat & UP Vat?
a) Will input credit be claimed for all such fixed assets purchased by company?
b) Is the treatment same under Haryana Vat & UP Vat?
02 August 2025
Here's a clear explanation on VAT input credit for your queries regarding a leather manufacturing company and purchases related to factory and office construction:
---
### 1. **VAT Input Credit on Various Purchases**
| Purchase Type | Input Credit Allowed? | Notes |
| ----------------------------------------------------- | ------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------ |
| a) Steel & iron for factory construction | **Yes** (capital goods input credit) | VAT on capital goods can be claimed, usually allowed to be claimed in installments (e.g., 1/3rd per year over 3 years in Delhi VAT). |
| b) Cement & other building materials for construction | **Yes** | Treated as inputs for business; VAT credit allowed. |
| c) Air Conditioner for Factory/Office | **Yes** (capital goods input credit) | Allowed, as air conditioners are capital goods for business use. |
| d) Wood & plywood for office almirah construction | **Yes** | Considered as inputs related to business, VAT credit allowed. |
---
### 2. **Treatment of Capital Goods Input Credit**
* Typically, **input credit on capital goods (like AC, steel, iron, cement for construction)** is allowed to be claimed **over a period of years** (e.g., 3 years with 1/3rd each year) to align with asset depreciation.
* This method avoids large upfront credit claims and spreads the benefit.
---
### 3. **State-wise Differences (Delhi, Haryana, UP VAT)**
* **Delhi VAT Act** explicitly allows capital goods input credit in installments (Rule 53(7A)).
* **Haryana and UP VAT Acts** also generally allow input credit on capital goods but **the exact provisions and installment rules may vary**.
* It's recommended to check the specific state's VAT Act and rules or consult with a local VAT expert for precise compliance.
---
### Summary
* Yes, you **can claim VAT input credit** on all such purchases if they are used for business purposes.
* Capital goods credit may be **spread over 3 years or as per state rules**.
* Verify **specific rules in Haryana and UP** VAT laws to confirm installment or claim procedures.
---
If you'd like, I can help you with the exact references from the relevant VAT Acts or a comparison chart between these states. Would that help?
---
### 1. **VAT Input Credit on Various Purchases**
| Purchase Type | Input Credit Allowed? | Notes |
| ----------------------------------------------------- | ------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------ |
| a) Steel & iron for factory construction | **Yes** (capital goods input credit) | VAT on capital goods can be claimed, usually allowed to be claimed in installments (e.g., 1/3rd per year over 3 years in Delhi VAT). |
| b) Cement & other building materials for construction | **Yes** | Treated as inputs for business; VAT credit allowed. |
| c) Air Conditioner for Factory/Office | **Yes** (capital goods input credit) | Allowed, as air conditioners are capital goods for business use. |
| d) Wood & plywood for office almirah construction | **Yes** | Considered as inputs related to business, VAT credit allowed. |
---
### 2. **Treatment of Capital Goods Input Credit**
* Typically, **input credit on capital goods (like AC, steel, iron, cement for construction)** is allowed to be claimed **over a period of years** (e.g., 3 years with 1/3rd each year) to align with asset depreciation.
* This method avoids large upfront credit claims and spreads the benefit.
---
### 3. **State-wise Differences (Delhi, Haryana, UP VAT)**
* **Delhi VAT Act** explicitly allows capital goods input credit in installments (Rule 53(7A)).
* **Haryana and UP VAT Acts** also generally allow input credit on capital goods but **the exact provisions and installment rules may vary**.
* It's recommended to check the specific state's VAT Act and rules or consult with a local VAT expert for precise compliance.
---
### Summary
* Yes, you **can claim VAT input credit** on all such purchases if they are used for business purposes.
* Capital goods credit may be **spread over 3 years or as per state rules**.
* Verify **specific rules in Haryana and UP** VAT laws to confirm installment or claim procedures.
---
If you'd like, I can help you with the exact references from the relevant VAT Acts or a comparison chart between these states. Would that help?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- Liable to deduct tds and 44ADA
- Payment to foreign customer
- TDS PROCEDURE ON SALE OF IMMOVABLE PROPERTY BY NRI
- Non issue of e way bill
- Subscription paid to foreign customer
- Gstr7 vs Gstr3b 2026
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
