Cst as input

Others 1771 views 6 replies

If a VAt dealer not registered under CST in his state, purchases something from out of state and pays 12.5% CST on the purchase and no C form is given as not registered under CST, then whether he could claim it as input or not if the purchased item is sold at 12.5% VAT again???

Replies (6)

No ,you can not claim the CST 12.5% which have paid on purchase time you have option anly include the cst in purchasing cost 

cst cannot be used to pay vat whereas vat can be used to pay cst

Remember as a Thumb Rule

In any Case , CST Paid CANNOT be taken as Input Credit.

It should be added to Our Purchases

 

CST CANT BE USED AS CREDIT TOWARDS PAYMENT OF VAT AS CST PAID IS REVENUE OF TEH GOVT FROM WHERE PURCHASE HAS BEEN MADE AND VAT PAYABLE IS REVENUE FOR STATE FROM WHICH SALE IS MADE. SO ITS NOT POSSIBLE TO TAKE CREDIT OF CST.

Hi ,

The input credit of CST is not allowed but may be added(value addition) in cost of purchase. It can be paid or adjusted with Vat of the state(local purchase). But one vat on purchase(input vat) may  be adjusted with the sale vat(Output) for paying any tax(i.e., Local Vat. This is due to the common phenomena-CST is the tax of the other state, whereas Vat is the State tax.

 

Regards

CA.CS.Nagendra P.Gupta

Some states will not allow you to buy materials for resale from other states if you do not have a CST Registration u/s 7(2) of the CST Act. Some states may allow it but after payment of Entry Tax. Anyways, the amount of tax paid on inter state purchases simply can not be claimed as Input Tax Credit. The amount of CST charged on the bill goes to the exchequer of the state of the selling dealer and quite obviously the state of the purchasing dealer is not going to allow the credit for it.


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