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VAT SETOFF

This query is : Resolved 
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(Querist)
10 August 2009 Dear All
Iam accounting a propritery manufacturing company (SSI)the firm purchase raw material & sale finish goods.The diff in sale & purchase tax is paid as vat.

the firm has purchase a machinery can the propriter take setoff on vat paid on machinery.

The Firm purchase oil for machinery if i account oil as direct expenses can the vat paid on oil be clamed.

the firm purchase rawmaterial from Interstate can the CST paid on purchase adjusted against vat payable.

Regards
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Vishnu Saboo

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Vishnu Saboo (Expert)
11 August 2009 as machinary is Capital good, as per VAT Act. this is eligible for VAT credit as per prescribed manner in law.
as far as oil is concern it is neither 'Direct RM' nor capital good, law denies for it's credit.actually it is very complicated as per Raw Material defination described in VAT act, if credit is allowed on processing material 'oil' can be treated as processing material, if it is not being used for power generation.
as far as concern to CST paid on purcahses, it is not avilable for set off against pat payable.
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