Dear Experts,
I work for a company which is yet to start manufacturing (in Karnataka) as it is in the machinery installation phase. We are likely to start production by the mid of next month. My query to you is that, can I take input VAT credit on capital goods now and utilize it next month once we start with manufacturing? Kindly reply
Praveen
In KVAT Law, there is no mention of availment & utilization, separately. Since the credit on capital goods can be taken only on commencment of commercial production, utilization would be in the respective month. However, to comply with the return filing requirements and as an established procedure, dealers are declaring the purchases and credit in the month of purchase. As rightly mentioned by you, it can be utilized in the month in which the production starts.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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