Vat credit & registration

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MAHENDRA KANTILAL TITA

Account Executive

131 Points Posted on 17 February 2013

Respected All,

My the Client Registered under SALES TAX WEF 1.4.2006 and he has opened new company W.E.F 01.04.2012 on other name (which is not registered under MVAT) and in new company he has purchase goods of which is 12.50% vat from registered dealer and same goods purchase from new company to his registered old company.

Now in his new company proprietor is his son and sales and purchase both Turnover exceeds Rs.5,00,000/- in september 2012 and till 16 FEBRUARY 2012 HE HAS NOT APPLIED FOR VAT REGISTRATION AND NOW SALES AND PURCHASE BOTH TURNOVER EXCEEDS RS.13,00,000/- TILL DATE.

I KNOW THAT VAT REGISTRATION MUST BE APLLIED AS SOON AS PURCHASE OR SALES TURNOVER EXCEEDS RS.5,00,000/- WHICHEVER IS EARLY.

NOW MY QUESTIONS ARE AS UNDER :

1) WHEN HE APPLIED FOR VAT FOR NEW COMPANY IS SET OFF AVAILABLE TO OLD COMPANY WHICH HAS PURCHASE FROM NEW COMPANY AND CLAIMED VAT SET OFF IN HIS OLD COMPANY.

2) WHAT WE HAVE TO DO IF SET OFF DENIED BY OFFICER IS THERE ANY WAY TO CLAIMED THE SET OFF IF DENIED BY THE SALES TAX OFFICER.

3) NEW COMPANY DO NOT KEEP ANY STOCK WHATEVER PURCHASE FROM REGISTERED DEALER THE SAME IS SELL TO NEW COMPANY.

PLEASE GIVE US ADVICE WHAT TO DO IN THIS CASE.

Replies (2)

ramakrishna

Professional Accountant

65 Points Posted on 18 February 2013

1. Only regd dealers are eligible to issue VAT Invoice to purchaser, which is serially numbered. 2. VAT Invoice will determine input tax credit. 3. This is the beauty of vat under which there will be vat chain which is formed by only the regd dealers. At any stage the chain is delinked the input tax credit will not be available to purchaser ( though he is the registered one). 4. Returns to be filed under vat are monthly etc,. 5. So as per my knowledge from the plain text of law, the company is not eligible for input tax credit. 6. However, at the time of company registration if the assessee is dealer the CA will ensure the registration under VAT also. THANKS, RAMAKRISHNARAO.KOLASANI