Input vat eligibility

VAT (Legacy) 2376 views 4 replies

Swetha Rani

Student CA Final

84 Points Posted on 08 November 2012

Hi all,

I wish to know is there any provision in the VAT law to an assesse can claim input relating to business activity only??

For example, If a VAT dealer carrying a business of Sale of Computer Peripherial.

On sale of products to customers he wil charge and collect VAT ( Say Rs. 100/-). He purchased some computer product on which he paid VAT to other dealer( Say Rs. 20/-) and also paid VAT to printing & stationery ( Say Rs 10/-) material he purchased for his office.

So my doubt is can he claim Rs 30/- as input vat in the return or only Rs. 20/- as Rs. 10/- paid to printing & stationery does not relate to business activity..

Please giv reply with reference suitable provision.

Thanks in advance..

Replies (4)

DAYANANDA K N

ACCOUNTS EXCECUTIVE

575 Points Posted on 08 November 2012

Under which state law you are asking this query.? under karnataka vat act stationary items are not eligible for input credit unless it is meant for resale.

Refer Sec 11(3) and schedule V.

Regards

Dayananda

CA Pooja Agarwal

Chartered Accountant

3228 Points Posted on 08 November 2012

prinitng and stationery is very much related to business.

but VAT on printing and stationary cannot be claimed as input VAt as it is not a direct expense ..

Input tax credit will be available for the taxable goods purchased for the purpose of:

Sale or resale within the State
Sale in the course of inter state trade or commerce
Sale in the course of exports
Use as raw materials, processing materials or processing materials in the manufacture of taxable goods
Use as packing of goods
Sale to SEZ/EOU
Transfer out side the State