For a Software services and products company, on what all inputs, can VAT be taken?
Ex: Can VAT be taken on Computer, Computer Hard disks purchased, Software etc though the company's sales basically relate to Software services and few software customised products.
You can avail the input tax of goods(software ) which go into the final product,or materials used in the process of manufacturing it can be availed as input credit......mjk
Computer Expenses are revenue expenses then full vat available if it is capital expenditure then input credit available after deducting 3% of taxable amount from tax. example if input tax credit is 12.5% then u can avail tax credit only 12.5% - 3% = 9.5% in case of capital expenditure.
Thank you for the replies. I have one more question arising out of this.
The company provides software services, but the software purchased by it does not go into the final product. It is more in the nature of software which is necessary for providing service, but does not go into final product. Can Input VAT be taken on such software purchases?
CAclubindia
