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Claim of credit


Prakash (Lawyer)     06 February 2008

Prakash
Lawyer 
 4 likes  165 points

| My Other Post

What if my input tax is much higher than my output tax. for example i buy a commodity for Rs. 112.50 (VAT paid is 12.5% i.e.  Rs.12.50 on 100 Rs. base price) i sell the same at 4% vat (i.e. output VAT is 4% on Rs. 150 which is my selling price, i.e. output vat comes ton Rs.6.00). Will i be able to claim credit of Rs. 12.50 - Rs. 6.00 - Rs. 6.50? Please clarify..

Regards,

avater

M.Sriram Shenoy (CA Final)     06 February 2008

M.Sriram Shenoy
CA Final 
 13 likes  814 points

View Profile | My Other Post

Prakash ji, you are eligible to a total input credit of Rs.12.50 which you have paid on your purchase. And as you have paid output tax at Rs.6.00 on your sale, you can setoff your liability of Rs.6.00 with your input credit of Rs.12.50 and you will still be left with the remaining credit of Rs.6.50 i.e (Rs.12.50 minus Rs.6.00).

avater

Vijay K. Agrawal (Service)     13 February 2008

Vijay K. Agrawal
Service 
 5 likes  608 points

View Profile | My Other Post

Yes , at year end you file refund claim.


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