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VAT on fixed asset (computer, printer etc..)

(Guest)

Purchase of Fixed Asset under VAT, can we claim VAT as input Credit?

If yes, why?

if no, why?

Thanx

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12 Replies

Harpreet (* * * * * *) (1670 Points)
Replied 02 May 2011

DEAR MEMBERS,

I HAVE WRITEEN ON THIS FORUM SO MANY TIMES THAT VAT IS A STATE SUBJECT HENCE THE QUESTION ON THE VAT CAN NOT BE ANSWERED AS THE QUESTIONS OF INCOME TAX AND SERVICE TAX ARE ANSWERED.

LET US WE DEAL THIS QUESTION IN A PROFESSIONAL MANNER.

WHAT IS INPUT CREDIT ON CAPITAL GOODS:-

NOW FIRST OF ALL WE HAVE HAVE TO SEE WHAT IS CAPITAL GOODS? EACH LAW OF STATE HAS DEFINED IT IN IT'S OWN MANNER BUT THE MOST USED OF COMMON DEFINITION IS :-

"CAPITAL GOODS MEANS PLANT AND MACHINERY , PARTS AND ACCESSORIES THEREOF WHICH HAVE BEEN USED FOR MANUFACTURING OF GOODS."

WHAT IS INPUT CREDIT ON CAPITAL GOODS:-

THE VAT PAID WITHIN THE STATE IS THE INPUT CREDIT ON CAPITAL GOODS.

SEE HERE IN LOST OF THE STATES THE INPUT CREIDT ON CAPITAL GOODS IS AVIALABLE ON PLANT AND MACHINERY AND ACCESSORIES AND PARTS THEREOF HENCE YOU CAN BE SURE THAT "TRADERS" CAN NOT CLAIM THIS CREDIT.

TIME OF CLAIMING CREDIT:- HERE SEE THE CREDIT CAN ONLY BE CLAIMED AS PER VAT STATE LAWS. SEE SOME OF THE STATES HAVE MADE THE LAW TO GIVE IMMEDIATE CREDIT BUT IN MOST OF THE STATES THERE ARE RESTRICTIONS OF VARIOUS TYPES . SEE SOME OF EXMAPLES:-

1. THE CREDIT FOR CAPITAL GOODS HAVING VALUE UP TO RS. 1 LAKH CAN BE CLAIMED IMMEDITALY.

2. FOR CREDIT FOR MORE THAN RS.ONE LAC BILL CAN BE CLIAMED IN TWO INSTALLMENTS - FIRST IN SEPT AND SECOND IN MARCH.

3. THE INPUT CREDIT ON CAPITAL GOODS CAN BE CLAIMED IN 12 INSTALMETS MONTHLY.

HENCE GO FOR PARTICULAR STATE LAW AND DECIDE THE FATE OF INPUT CREDIT ON CAPITAL GOODS.

MY SUGGESTIONS TO VAT QUESRIES:-

1. SHOULD INFORM THIER STATE.

2. PLEASE CLARIFY THE PROBLEM IN BRIEF .

MY SUGGESTTIONS TO MEMBERS WHO ARE REPLYING:-

1. IF THE PROBLEM IS NOT OF YOUR STATE PLEASE DON'T TOUCH IT

2. ONLY THE CA/EXPERS WORKING IN THAT STATE SHOULD COME FORWARD AND TACKLE THE PROBLE.

(THE AUTHOR OF THIS REPLY IS A VAT EXPERS FROM RAJASTHAN HAVING WRITTEN A BOOKS ON VAT IN HIS OWN STATE AND CAN ANSWER GENERAL QUESTIONS ON VAT PLUS SPECFIC QUESTION ON VAT IN RAJASTHAN.

FURTHER THE AUTHOR HAS ALSO WIRTTEN ABOUT VAT IN THE FOLLOWING STATES :- DELHI, MAHARASTRA, KARNATAKA AND WEST BENGAL- IN CHARTERED ACCOUNTANTS PRACTICE JOUNAL, DELHI- VAT SPECIAL 2005 ALSO WRITTEN IN ICAI CA JOURNAL -VAT SPECIAL IN 2005 WHEN VAT WAS INTRODUCED IN COUNTRY.)

- MY SPECIAL REQUEST TO ALL THE MEMBERS:-

2 MARKS IS REPLY KE LIYE KAM RAHENGE , PLEASE REQUEST THE ADMIN TO GIVE ME AT LEAST 25 MARKS FOR THIS REPLY.

ALL THE CONCERNED SHOULD NOT TAKE THIS REPLY AS AN OFFENCE AND READ AND ACT IN TRUE SPIRIT AND SENTIMENTS IN WHICH THE REPLY IS GIVEN.

3 Like

(Guest)

yes you can claim input credit on capital goods

Mayur Gondaliya (Advocate & Tax Consultant) (422 Points)
Replied 02 May 2011

You Cant

As to claim credit of capital goods, that goods must be used in Production or manufacturing of commodity which is chargeable to tax hence you can not claim credit of Goods under question

Harpreet (* * * * * *) (1670 Points)
Replied 02 May 2011

Mayur is right

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 02 May 2011

computer / printer does not quality for capital goods under VAT rules, i.e these are not a mandatory plant and machinery for production. hence input tax credit inadmissible

CA Govind Gupta (Proprietor) (152 Points)
Replied 02 May 2011

Yes, on certain capital goods you can claim input vat

like machinery, tools, plant

thus, we can say on those capital goods which related to production we can claim Input Vat in 3 years (means 1/3 rd in every year)

dathu.achhukola@gmail.com (dathu.achhukola@gmail.com) (222 Points)
Replied 03 May 2011

You are not a trader You should not claim input

If you are a trader Trading with That Then You Claim InPut

sandeepverma (don't make exuse for study) (304 Points)
Replied 03 May 2011

No input claim available in this case only if trade of this than u claim this tax credit

(Guest)

Thanx for your ans;

Actully company is advertisinng in maharashtra!!!!!!

Deepika (CA Final) (24 Points)
Replied 06 June 2011

Hi,

Can you please tell whether vat input can be claimed on the purchase of computers as per the rajasthan vat act.

A quick reply shall be highly appreciated.

Thanks

Deepika Modi

CA Final Student

CA. Roopali Kadam (Jobs on assignment basis.) (1453 Points)
Replied 16 June 2011

Originally posted by : Mayur Gondaliya
	You Cant As to claim credit of capital goods, that goods must be used in Production or manufacturing of commodity which is chargeable to tax hence you can not claim credit of Goods under question