Adjustment of input vat

   Logic behind allowing VAT credit against payment of CST and not allowing                               credit of CST:

• Sales tax is a source of revenue for each state.CST is collected by the appropriate state,which is the state in which the selling dealer's place of business is located.
• Ex:       Thus,if a dealer in A.P makes inter-state sale to a dealer of Karnataka,the CST on such sale will be collected by the state of A.P.If the credit of such CST is allowed to the dealer of Karnataka then,the revenue of the state of Karnataka will get reduced.Hence ,the credit of CST is not allowed.
• However,the dealer of A.P can very well use the VAT cr,of purhases made from the state of A.P against payment of CST on inter-state sales,as the VAT was paid to state of A.P only and CST against which is set off is also payable to state of A.P.There will be no loss of any revenue to A.P