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VAT

N V Ram (Manager) (272 Points)

25 May 2009

Pl. clarify the treatment of VAT on Capital Goods under Karnataka Value Added Tax ?

Can Input VAT Credit on Capital Goods be claimed immediately or over a period?

What is the treatment of Depreciation on CG if VAT input is claimed ? Whether VAT input credit claimed needs to be excluded while calculating depreciation ?

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3 Replies

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 25 May 2009

In Karnataka the full credit of VAT paid on capital goods is available in year of purchase. The entry would be to account for the CG net of VAT and therefore the question of depreciation being charged on that should not arise.

If that was done it would amount to double benefit.

Shreyalmuri (CA Final) (236 Points)
Replied 25 May 2009

.... the above one is right, but u can't able to take 100% credit in one year. 50% in the year of purchase & the other part in next year.

ghanshyam upadhyay (tax consultant) (72 Points)
Replied 29 May 2009

As per APVAT Act 2005 you can claim 100% input tax credit on capital goods. If you need any further information you can contact me on mobile 09246527173 or e mail me gsupadhyay @ sify.com (Ghanshyam upadhyay., VAT Consultant, Hyderabad.)