We are manufacturures of pharmaceuticals raw material. we use CNG Gas as fuel. It is out of GST. earlier we use vat paid as input tax rebate on CNG but now as we have migrated to GST & supplier of CNG still charging 14% VAT on CNG.
Can we claim credit of the same anywhere??
Where is the CNG supplier based out of and why is he still levying VAT?
Supplier Is Aavantika gas Limited based in Ujjain Madhya Pradesh
as the petrolium products are out of GST Regime they are still charging VAT on it
Pls Suggest what to do
Yes right, thanks for clarifying. From what I understand, there is little you can do in this case. You cannot claim input credit of VAT paid and this results in cascading effect of tax. The oil ministry has taken up this issue with the finance ministry and urged them to move certain petroleum products (including CNG) from the exempt category to zero-rated category so that input can be claimed on such supplies.
The government might be considering this request and negotiating with the state governments on this. However, until they arrive at a consensus, I'm afraid your company will have to suffer the tax burden.
I'd be glad to know if there is any other solutions which the experts may offer.
Naveen Fintech Pvt Ltd
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Gupta Sachdeva & Co. Chartered Accountants
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