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Vat set off

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sandeep s

director

24 Points Posted on 20 March 2013

Hello

We are a small business that is providing machinery maintenance services to customers in Mumbai. We have purchased a maruti eeco van in partnership company name for the purpose of carrying tools & transport for our technicians

We are also supplying some spare parts for which we charge VAT to our customer

Can we claim set off for the VAT we paid for the vehicle, against the VAT payments we will deposit for the spares sales?

Our accountant has advised us to take the entire value of car (incl. VAT) as the asset value and claim depreciation on the total rather than split between price & VAT.

He says it is easier to deal with IT rather than Sales Tax and therefore advising not to claim any VAT setoff?

What should we do? Please give suggestions/comments

Thank you

Replies (2)

Giridhar S Karandikar

Team Lead

5675 Points Posted on 20 March 2013

First see how much benefit of the set-off you are getting.

As advised by your accountant, it is optional to either take vat set-off of the VAt paid on the purchase of car or to claim depreciation. In either way you are saving tax one through set-off or by claiming depreciation from taxable incoem.