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How to set off vat credit for service tax payment in gst?

Tally Gyan (MBA) (430 Points)

12 April 2017

Dear CAClubian,

Greetings!!

I have query regarding Service tax and vat migration in GST. For supposed that someone has to be liability in service tax along with has Input credit more than its service tax liability, So in this scenario, let me know that Its service tax liability can be set off by Vat Input credit at the time of GST apply.

Thanks for the anticipated response.

With Best Regards
Naveen Sethi
www.sethisolutions.com

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5 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 12 April 2017

No, it cannot be done. Service Tax liability shall be paid in cash before GST implementation. Extra VAT credit shall be taken in GST as SGST credit. Later it can be used to pay SGST or IGST as needed.

MUKESH BHATTER (PROFESSIONAL) (47 Points)
Replied 12 April 2017

Once the GST is in force -The service tax liability would be CGST liability & VAT input Credit would be SGST Credit .

Credit Setoff Rules as per DRAFT is as under-

IGST payments can be set off against –Credit of IGST, CGST, SGST

CGST payments can be set off against –Credit of IGST and CGST

SGST payments can be set off against – Credit of IGST and SGST .

Conclusion : Setoff would not be possible.

Tally Gyan (MBA) (430 Points)
Replied 12 April 2017

Originally posted by : Rajesh Kumar
	No, it cannot be done. Service Tax liability shall be paid in cash before GST implementation. Extra VAT credit shall be taken in GST as SGST credit. Later it can be used to pay SGST or IGST as needed.

Thanks a lot sir, for this nice explanation of my GST query. God bless you! I hope this post'll clear many doubts of GST concern.
And request you kindly subscribe my You tube channel of Tally Gyan

Tally Gyan (MBA) (430 Points)
Replied 12 April 2017

Thanks a lot Sir.....You describe the whole GST process extremly very well.I would like to forward your explanation to others so that everyone can understand the right process of GST set off.god bless you !!

Tally Gyan