Input credit for vat

purchase of capital goods=Rs 100000,vat paid(not included in purchase price)=Rs 10000 

1.sale price of said capital good=RS 150000

2.Sale price of the capital good=RS 70000

if the assessee uses the capital good merely for production,i.e he is not a dealer of the capital goods,will he be allowed input credit??

 

Replies (8)

No, only the registered dealer can avail benefit of claiming input tax credit.

yes he will be allowed input credit

     Allowing ITC on purchase of capital goods is restricted to some selected machinaries and plants in most of the states. This is given in in a notification. Find out what is the rule in your state.......mjk

Hi,

IF u have V.S.Datey sir's book refer page.no 21.

or for ur ref

Credit will be available of tax paid on CG purchased within the state.credit will be available only in respect of goods used in manufacturing and production.the credit will spread over 3 years and not in first year itself.there will be a negative list of CGs.

The credit  of CG is available only for manufacturer or proceesor.

A trader can avail Input tax credit on CG only when he is trading of those CGs.

Rgds 

No, only registered dealer will take ITC.

no you are not take ITC

The issue of capital goods arises only with a mnufacturer and not with a trader......mjk

plz refer para 2.4 of White Paper ​on State-Level VAT for further reference.

 Para 2.4 If the tax credit exceeds the tax payable on sales in a

month, the excess credit will be carried over to the end of next
financial year. If there is any excess unadjusted input tax credit
at the end of second year, then the same will be eligible for refund.
 
Input tax credit on capital goods will also be available for
traders and manufacturers. Tax credit on capital goods may be8
adjusted over a maximum of 36 equal monthly instalments.
 
The States may at their option reduce this number of instalments.
There will be a negative list for capital goods (on the basis
of principles already decided by the Empowered Committee)
not eligible for input tax credit.
 
rgds

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