Input Vat on Capital Goods

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Q.  Business formed on 1.1.2010 and got Vat registration on 1.4.2010 but sale took place from 1.4.2010..Can the dealer claim the input vat on capital goods purchased on 1.1.2010 but used from 1.4.2010 ?


Q.  Business formed on 1.1.2010 and got Vat registration on 1.4.2010 but sale took place from 1.4.2010..Can the dealer claim the input vat on capital goods purchased on 1.1.2010 and used from 1.4.2010 ?

Replies (1)

 

Ans. FOR THE ABOVE QUESTION RAISED THE ANSWER IS NO, ANY DEALER CAN AVAIL THE BENEFITS OF CLAIMING INPUT TAX CREDIT ONLY WHEN THEY GOT REGISTERED UNDER THE SAID CTO DEPARTMENT AND THERE ARE TWO WAYS FOR GETTING REGISTERED UNDER VAT.

01. VOLUNTARY REGISTRATION.:

      Any dealer effecting sales of goods liable to tax under this Act ,who is not otherwise liable to register and who registers himself as a VAT Dealer.

      Dealer opting for voluntary registration shall make taxable sales and the said dealer shall have a prominent place of business.

in this case if dealer fails to file the tax returns and his taxable turnovers doesnot exceed the prescribed slab by the said CTO Department the authority shall cancel the registration after giving the VAT dealer the opportunity of being heard.

 

02. START UP BUSINESS:

Any dealer intending to setup a business in taxable goods and effect sale of goods with in next three months who is not otherwise liable to register may also register as as VAT dealer .The dealer registered as a start up business may claim input tax credit in respect to tax paid on inputs relating to the prospective taxable business activities .

EXAMPLE:        For example a rice miller intending to construct a rice mill and do business may purchase capital goods or paddy ,the tax paid thereon can be claimed credit even though no sales are made .when once he makes a taxable sale he shall become registered , if no taxable sale is made with in period of 24 months from the date of registration ,his registration will be cancelled .


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