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VAT Input Credit Adjustment against CST Liability

CMA.Baskar.V (Cost Accountant) (400 Points)

06 June 2011

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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24 Replies

Nizzu (.) (34 Points)
Replied 06 June 2011

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

2 Like

CA Vibhash Kumar Sah (Associate Manager) (700 Points)
Replied 08 June 2011

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.

2 Like

ashish gupta ( student) (1922 Points)
Replied 11 June 2011

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.

3 Like

ashish gupta ( student) (1922 Points)
Replied 11 June 2011

atanukar2010@gmail.com (Executive Commercial ) (24 Points)
Replied 25 November 2011

Hi,

Can you Help

CAN CST BE PAYABLE OUT OF INPUT TAX ?

WHAT IS WORK IN PROGRESS?

Regards,

Atanu

pawan (cd) (21 Points)
Replied 28 December 2011

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

shanmugam (Finance Professional) (22 Points)
Replied 11 September 2012

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

shanmugam (Finance Professional) (22 Points)
Replied 23 September 2012

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

please check and give your suggessions.

this is usefull for cst adjustment

Sairam (Article assistant) (159 Points)
Replied 25 May 2013

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

1 Like

Sairam (Article assistant) (159 Points)
Replied 25 May 2013

Originally posted by : Sairam

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

Dear Mr.Shanmugam,

We can claim VAT input against CST payable with "c" form. Hence 3544-700=2844 to be carried forward as per my calculation and knowledge. Kindly correct me if I am wrong.

Regards

Sairam.S

afzal bhimani (GM) (21 Points)
Replied 21 July 2013

I have a query which seems very confusing below is a scenario We have company in maharashtra and a distributor in delhi who distributes our product in delhi to supermarkets . We bill him in cst and he bills ahead in vat as per our agreement we cover his cst n vat and give him a net % as his margin. When we bill him following is the calculation Mrp-retailer margin-distributor margin-state vat-cst = basic price of billing Now we cover for him all the above. Still he is asking for another state vat as he says his purchase is in cst n billing in vat how is he paying double vat on the invoice as per him initial covered vat is distributor vat and additional is retailer vat Is he right in his claims or initial vat cover should be good please advice urgent

ankit (accountant) (28 Points)
Replied 20 April 2014

Dear Sir/Madam Please calculate the CST & VAT Liability of 4th QTR. SALE 2% (CST) 17106 , 5% (CST) 10926 5% (vat) 104211 5% (vat Wct) 39043 VAT refundable 3rd QTR 24803 Purchase 12.5% (vat) 3339 5% (vat) 87018 12.5% (vat Wct) 1881 5% (vat Wct) 7027 SAME CHALLAN I FILL BOTH LIABILITY YES OR NOT PLEASE CLEAR

Deepak Sharma (Accountant) (21 Points)
Replied 16 June 2014

R/Sir,

My problem is that my company it is (Pvt. ltd.) purchase goods for other state and also sale goods to other state. can we take advantage of input cradit in tax return.

Ex. input cst- out put cst = cst payable or receiveable

Please reply..