Vat input credit on capital goods

Hi Natarajan 

Assuming that your company is registered under Karnataka Vaule Added Tax.

As per Sec 11(a) (2) of Kvat Act,2003 restrict the input tax paid on capital goods except if those capital goods are used in manufacture or other process, or resale or in the business then there would not be any restriction of input tax credit.

For your kind reference 

https://dpal.kar.nic.in/English%20Act.pdf

Regards.

it would be better to capitalize whole amount including vat.

I am agree with Rengaraj and Neeraj Singh, as your company a service provider based company can not claim for input vat, only a manfacturing firm/ company can claim for input vat on capital goods and only that goods which related to manfacturing plant not related to  the office use goods

capatalised rs 104000/- because you dont take credit of vat.

capitalise 104000 as 4000 vat is the cost incurred to bring the computers to a condition where they can be utilised by the business

Rs. 1,00,000 i.e cost of computers excluding input credit is to be capitalized and you are not able to claim input credit on computers as they are used in office and not at plant place and ideally not regarded as capital goods on which vat credit is claimed.

As per Delhi VAT Act 

Capital Goods means machinery , plant  ,equipment which directly or indirectly  used in the process of trade or Manufacturing or for Execution of works contract in Delhi

If ur Co. is registered under VAT act  then 

in my opinion computer will be used for provifding the sevices to the client either directly or indirectly i.e this will be used in the pocess of providing services but not in the Nature of trade (i.e first purchased something then make some additions & sold the same item & make profit within that). hence VAT can not be claimed 

the entry will be 

Computer a/c  Dr.         104000

   To Cash / Creditor                      104000

Dear Natarajan and other freinds ..

Total amount shoud be capitalized including the VAT paid.

As because in terms of Sales Tax, Computer purchased for used in office cant be treated as Capital Goods because it has nothing to do with the productions and manufacturing.. or your business's direct operation.

I Agree with Bhanu Prakash

Right, you cant claim input credit on computer purchased. You can set off the input credit only in purchasing of machinery.

So, capitalise the same with cost + vat = total bill value.

how to make capital goods entry in tally.

I have an Automobile service Industry. I purchased machineries to test the Fuel Injection Pump . The parts used to repair suffer VAT and service charges come under service tax. Can I take input credit of those machines. My firm is in Karnataka