If Asset is purchased by a manufaturing Unit and is used in the Office and not for production, then can VAT Credit be availed on that?
Eg. X, a manufacturing unit, purchased Furniture and is put to use in the office. Then VAT paid to be capitalised or input credit can be availed?
Pl. Reply
Thanks in advance:)
Hi,
I am not very sure but I think that VAT credit would be available only to the extent of 4% even if the purchased article carries more then 4% VAT.
Kindly note that VAT credit should not avail while capitalsing an item as an asset since it has not put into the manufacturing/production activity.This is the usual procedure adopted by most of the companies.
Vat credit is available on furniture = actual vat paid - 3%
Means - If VAT paid 4% on furniture, 1% VAT credit will be available.
If VAT paid 12.5%, 9.5% credit will be available.
Jawahar and Associates Chartered Accountants
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VIKAS VERMA & CO
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Interactive Media Pvt Ltd.
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