VAT on Excise

I purchase goods from my creditors. I am a manufacturing company. I am a person registered under the TNVAT Act.The break up of my creditors bill is as follows.

(1)Basic amount                                xxx
(2)Excise Duty                                  xxx
                                                      -------
(3)VAT on (1)+(2)                           xxx
                                                      -------
Total amount payable                       xxxx
                                                   =======


I take the excise duty charged on my bill for Input Credit. I also take the VAT on my bill for Input Credit. Now is there any violation in this case because I am taking credit for excise duty and also for VAT which is calculated inclusive of the excise duty for which credit has already been availed.Whether the vat amount should be calculated only on gross amount excluding excise amount or can that be calculated on the sum of both these amount.Please validate the answers with any section,circular or case laws.
Replies (1)

hey dear the basic difference in CENVAT & VAt is that in case of VAT one can take credit of all tax whatever he paid, but on the contrary in case of CENVAt he can claim on input excise duty\ service tax only.

So dont worry you are absolutely right, infect you are paying VAt on excise duty also.

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