If a product is sold under CST @ 2% and the for the same was made under VAT @ 14.5%, Can we claim the Input Credit against such CST sales?
Eg: If product A is sold for Rs. 1000/- then the tax liability under CST @ 2 % would be Rs. 20; if this product was purchased for Rs. 1000/- under VAT @ 14.5% then the VAT input credit would be Rs. 145/-
Can We claim a refund for Rs. 125 (Output: 20 less Input: 145)?
P.S: Assumed Purchase & Sales Rate as the same for easy understanding
yes u can adjust the VAT input against cst liability but not vice-versa
Agreed with Subhash but for which state you are talking?
YEs you can take the credit of VAT input to discharge the CST liability
And also you can apply for the refund of balance Input Credit
But you can not take credit of the CST paid if you purchase outside from the state. CST on purchase has to be paid in cash but CST on sales can be adjusted from the Input VAT
Hope this helps
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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