WHETHER VAT (INPUT) CREDIT TAKEN UNDER CST ?

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CA divine

CA divine (Querist)
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13 February 2009 HI SIR / MADAM
I HAVE ONE QUERY THAT CAN V TAKE INPUT VAT CREDIT UNDER CST ?

Ram Avtar Singh

Ram Avtar Singh (Expert)
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13 February 2009 input CST can not take credit. only you can adjust input vat with CST libility.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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13 February 2009 Yes.
Mr.Ram is correct.

Reetika Goel

Reetika Goel (Expert)
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17 March 2009 U can claim Local VAT credit while calculating for CST liability but vice-versa is not allowed.

Reason for the above provision is:

- Local Tax proceeds are kept by that Local State Government.
- Central Sales Tax proceeds are also kept by the state government which collects it.

In case of Local Tax, the levy is created by that particular government and is collected by that only.
So, while allowing Tax credit it won't to mitigating funds to some other state government, rather its a mere adjustment of own funds with own funds.

e.g.: DVAT is levied and collected by Delhi government only, so while paying DVAT if an assessee adjusts input DVAT with its liability, then it won't be affecting Delhi Government funds rather its mere adjustment of funds.

In case of CST, tax is levied by central government and is collected by the state government from where movement of goods has started. The input CST must have been paid in some other state and output CST/VAT in some other state... It will directly affect the funds of the state collecting the output CST if it allows input CST credit...
That's why credit of INPUT CST is not allowed anywhere.

Hope you hv instill the concept and will not be required to cram this thing..
For further clarifications, Mail me at "ca.reetika_goel@hotmail.com"

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