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Vat input credit on purchase of new vehicle

Mythili (Completed B com and pursuing CS Inter) (68 Points)

20 January 2014

Hi, I have a query on Vat credit..Kindly help me out.I bought new vehicle on 1st January, 2014. VAT paid by me while purchasing the vehicle can it be claimed as capital VAT input credit (i.e 50% current year and balance 50% next year). Whether this input credit can it be adjusted against sale of engineering components.

Whether the un-availed capital input credits of the above can it be eligible for refund?

Thanks in advance.

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18 Replies

TARSEM SINGH (senior accounts) (24 Points)
Replied 20 January 2014

Vat input credit only adjusted machinery capital , relaited to production.

1 Like

karan jit singh (Consultant) (1299 Points)
Replied 20 January 2014

If this vehicle is used for prodn then ofcourse credit is admissible. But hw much credit u can avail in same year is depend upon state to state...Delhi provide 1/3 of cr same year,, and rest cr in subsequent 2 f.y.,, Yes, if the ITC remain unutilised till next f.y then you can claim refund as per white paper.., but it may deviate depending upon state to state

1 Like

vinayak bhoote (Consultancy Services) (57 Points)
Replied 21 January 2014

Input vat credit on capital goods can be claimed only for machinery used in the production of vatable goods. It is not available on all fixed assets.

1 Like

Kunal Jain (CA Job) (28 Points)
Replied 21 January 2014

ITC is allowed only on capital goods used for production, and vehicle is not used in production, as well as it is not given to end customers, i.e.consumers but only to traders. As well as ITC on capital goods is available in 1/3 equal installment in 3 F/Ys, as per White Paper.

1 Like

Prerna (NCMP M.Com MBA CA (.Inter)) (50 Points)
Replied 21 January 2014

Will New vehicle be treated as capital asset to take benefit of itc

CA Nitesh (Chartered Accountant) (131 Points)
Replied 21 January 2014

VAT Credit is only available on purchase of Raw Materials and Capital Goods used in process of manufacturing. Since Vehicle does not constitute as Capital Goods used in process of manufacturing ITC cannot be claimed on the same. Moreover ITC is not available on purchase of Vehicle Spare parts even.

1 Like

CA Ankesh Ajmera (Associate) (25 Points)
Replied 21 January 2014

Maithili generally the vehicles are covered under the category of goods which are specifically excluded from Input tax credit.

Still I can let you know the exact treatment if you can let me know the name of the State

1 Like

Avinash (xxx) (24 Points)
Replied 21 January 2014

Vat credit is available on inputs and capital goods used in production. Howmuch credit is available is to be derermined once eligibility criteria is meet. On vehicle vat credit is not available

1 Like

B.N.Dharmendra (Senior Manager Indirect Taxation) (136 Points)
Replied 22 January 2014

Dear sir,

In case of Tamil Nadu, ITC is not eligbile to claim on purchase of vehicles even its used in factory for carrying the goods, etc. Its very clearly listed in TN VAT ACT No.32 of 2006 (11) "Capital Goods means - "

1 Like

vishal (MBA) (40 Points)
Replied 22 January 2014

On purchase of any assets vat input credit not get

sudalaimuthu (Lawyer) (26 Points)
Replied 23 January 2014

ITC can be claimed but the purchased vehicle should be used in the process of production. under TNVAT Act, the ITC can be claimed on the tax paid for capital goods in 3 years(50% in the first year, rest in the next two years.

1 Like

chandra sekar (Manager-Accounts) (387 Points)
Replied 23 January 2014

In Tamil nadu, the ITC can be taken only for the capital goods,used in production,which is very clearly referred in the ACT, as PLANT & MACHINERY. That too,50% in I yr and 25% each in II & III year.

1 Like

CA Shyam Agarwal (Practice) (690 Points)
Replied 20 August 2015

If A company doing mining activity. and extracting ball clay by using truck. I think in that is truck are plant and machinery and direct nexus with production process.

Can we take input credit for input for vat paid at the time of truck purchased.

and so many times we replaced the tyre/tube and parts of the truck. can we take the credit of input for vat paid at time of replaced the tyre/tube etc.