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Regarding vat input tax

Prakash (executive-finance) (38 Points)

24 February 2012  

I have a doubt regarding Vat input tax

Is there any vat input tax for rice bran, if purchased from unregistered dealer

Whether seller has to pay regarding that vat input.

For example if X buys from unregistered dealer / farmer  for Rs 100 (VAT 5%) then, is buyer 

responsible for that  VAT OF Rs 5.

Thanx in advance


 9 Replies

Sivaguru SM (Tax Consultant) (235 Points)
Replied 24 February 2012

If purchase from unregd dealer/farmer, there is no question of tax component.  X is responsible for VAT 5%

1 Like

CA SUMANTH (LEARNER.....) (294 Points)
Replied 24 February 2012

Buyer has to pay taxon URD purchases. He can take input credit of such payment in subsequent month.

1 Like

Pulkesh Mehta (Chartered Accountant) (243 Points)
Replied 24 February 2012

If a buyer purchases goods from Unregistered Dealer there is no question of VAT on it bcoz buyer hasn't pay any VAT ,so thereby no question of VAT Input.In Qtrly return you have to deduct purchases from Unregistered dealers from Gross Purchase and it  will be treated as Exempted Purchases.

1 Like

Ravi Shankar (Chartered Accountant) (186 Points)
Replied 27 February 2012

Dear Prakash,

Input Tax credit can be claimed only when a registered dealer purchases goods from another registered dealer and the selling dealer must have indicated the tax collected in the sale invoice. The original invoice is instrumental for claiming this credit.

Now, when the purchasing dealer buys from an unregistered dealer, there is no question of any input tax credit since the seller is not authorised to issue a tax invoice. Also, the buying dealer is not required to pay any tax on its purchase, if the goods suffer tax at the point of sale by the registered dealer.

Purchase tax is payable by the buying dealer when the goods purchased from unregistered dealer is used for manufacture of tax-exempt goods or for branch transfer, where no tax on sale is leviable.


jaimin shah (Finance Manager) (111 Points)
Replied 07 March 2012

can not claim tax credit if purchase from unregistered dealer in any case.

Kolluru Krishna Murty (Partner) (315 Points)
Replied 10 March 2012

I partly agree with Mr.Ravi Shankar.

Some "Goods" attract Purchase Tax in some states .

If the above material falls in that category goods it attracts Purchase Tax.


Anoop (Service) (345 Points)
Replied 10 March 2012

I agree with KKM. Wherever purchase tax is applicable, a regd. dealer (Purchaser) will pay tax on purchases and then he'll get input credit of tax paid on purchase from its output tax which is payable on sales.


Rakesh Mishra (Asst. Auditor) (42 Points)
Replied 15 March 2012

Hi friends,

Please help me. I am having one doubt. Actualy I am woking for Sales tax under TNVAT Act for various clients. Among the one of the client is having business of salling of Sands, bricks, chips, steels etc. as wel as that undertake to supply to buyers place for which he is having one lorry. and for that lorry he generly spend for new tyre.

Here my question is whether he can take ITC as paid for the purchase of new tyre.

Please help...

prasanna kumar (NOT APPLICABLE) (21 Points)
Replied 27 December 2013

kindly explain regarding tax exemption which can be claimed from urd purchases of bran (taxable @ 5.5%) in case of rice merchant who is dealing in both rice and bran


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