VAT Input Credit Adjustment against CST Liability


Cost Accountant

Hi,


Please confirm below logic ok for VAT input credit adjustment for CST output tax

 

VAT Purchase (Input Tax) - CST Sales (Output Tax) - Can Adjust with input tax Credit

CST Purchase (Input Tax) - VAT Sales (Output Tax) - input tax can not  be adjust against with out tax
 

Thank you


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Yes,  you are correct. VAT input tax can be adjusted against VAT/CST output tax liability, where as the tax paid on CST purchase (2% some cases with out C forms rate may be different) can not be adjusted against the against VAT/CST output tax liability


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Associate Manager

 

Originally posted by : CMA.Baskar.V

Hi,


Please confirm below logic ok for VAT input credit adjustment for CST output tax

 

VAT Purchase (Input Tax) - CST Sales (Output Tax) - Can Adjust with input tax Credit

CST Purchase (Input Tax) - VAT Sales (Output Tax) - input tax can not  be adjust against with out tax
 

Thank you

 CST has a cascading effect. No Input Credit is available for CST paid. Conseqiuently there is no question of adjusting the same with the VAT or CST Liability. However, Input Credit for VAT is avaialble suject to conditions mentioned in different States VAT Act. Once it is eligible to take VAT Input Credit, the same can be adjusted with VAT or CST ouput Tax liabillity. 


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student

simple logic is though CST is Central Sales Tax but it is the revenue of State government. thats why of you pay CST on purchases the revenue goes into the pocket of that state government from where you puchased the goods.

And Output Vat is paid to State government which will not allow the creddit of CST paid to other state. On the other hand if you deposit the CST on outside sales to your State Government you can get benefit of Input Vat paid by you.


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student

simple logic is though CST is Central Sales Tax but it is the revenue of State government. thats why of you pay CST on purchases the revenue goes into the pocket of that state government from where you puchased the goods.

And Output Vat is paid to State government which will not allow the creddit of CST paid to other state. On the other hand if you deposit the CST on outside sales to your State Government you can get benefit of Input Vat paid by you.

 
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Hi,

Can you Help 

CAN CST BE PAYABLE OUT OF INPUT TAX ?

WHAT IS WORK IN PROGRESS?

Regards,

Atanu 

 

 
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is it necessary that total input credit should be higer than total output  vat and output cst through out the month.

 

 
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Finance Professional

Hi, i am N.shanmugam working in a private company

my question is  we are taking input credit  from local purchases (TN) sales made to TN as well as other states, we are adjusting local sales tax with the input credit , also adjusting the cst sales tax against form 'C".  ....... sales made to other states without "C" form ie... 14.5% tax presently, the realed ITC  also we have reversed . the excess ITC available with us was adjused with the cst 14.5% sales tax, Now the CTO wanted to pay the tax amount  of inter state sales @ 14.5%  by cheque payment. u/s 19(5) c . can any one explain in this with proper expalantion and examples cotting the section also

thanks and regards

shanmugam

 

 
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Finance Professional

Purchase (TN) 100000 @ 5%  - 5000

Purchase(TN)   50000 @ 14.5%- 7250

Total Input vat credit - 12250

Sales(TN)  40000 @ 5% - 2000

Sales(TN) 30000 @ 14.5% -4350

Sales to other state 35000 @ 2% against c form - 700

Sales to othr state 25000 @ 14.5% - 3625

Total ITC available - 12250-1094 = 11156

VAT Payable -6350

CST payable (700+3625)= 4325

Reversal of credit  - 12250 x 25000/280000 = 1094

Input tax credit available = 11156

Less: adjustment (6350+4325) = 10675

Input tax credit carrief forward to next month Rs.481-00  

Shanmugam

Hi

please check and give your suggessions.

this is usefull for cst adjustment

 
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Article assistant

Dear Mr.Shanmugam,

First of all ur reverse credit calculation is wrong.

It is total itc X Sales outside TN/total sales. which comes to 12250*25000/130000=2355.769, to be rounded off to 2356. Hence itc available for set off is 12250-2356=9894. on which u can adjust sales made inside tn, i.e. 6350. it comes to 9894-6350=3544. But am not sure whether u can adjust cst payable against VAT input credit


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