Please Help: VAT
Posted Date : 26-Dec-2011 , 12:26:24 am | Posted By Rishabh Upadhyay
Will purchase Tax paid on purchase of Wheat will be eligible for Input Tax Credit at the time of sale of Packed Flour?
Category : VAT | Answers : 2 | Comments : 2 | Hits : 354
Answers
Answer By: Ashish Karundia
Dear Rishab,
Please let us know the state in respect of which you want to know the eligibility of credit of purchase tax paid.
Please let us know the state in respect of which you want to know the eligibility of credit of purchase tax paid.
Answer By: Ashish Karundia
Dear Rishab,
As per Section 19 (4) of the THE PUNJAB VALUE ADDED TAX ACT, 2005 as extended to the Union territory of Chandigarh provides that the purchase tax paid by a taxable person, shall not be admissible as input tax credit, unless the goods are sold within the Union Territory of chandigarh or are used for manufacture of taxable goods in the Union Territory of chandigarh for sale or are sold in the course of inter-state trade or commerce or in the course of export. Further, section rovides that iput tax credit, on the goods specified in schedule 'H' or the products manufactured there-from, when sold in the course of inter-State trade or commerce, shall be available only to the extent of Central Sales Tax, chargeable under the Central Sales Tax Act, 1956.It may further be noted that second proviso to Rule 22 Provides that the purchase tax paid under section 19 of the Act, shall be considered as input tax credit for the purpose of subsequent sale in the hands of same person.
Thus, it can be said that the credit of purchase tax is available subject ot the fulfillment of the conditions discussed hereinabove.
Further, Rishab the state was specifically asked so that the reply can be supported with the sections of the respective state instead of saying anything hay-way.
Hope the above suffice.
As per Section 19 (4) of the THE PUNJAB VALUE ADDED TAX ACT, 2005 as extended to the Union territory of Chandigarh provides that the purchase tax paid by a taxable person, shall not be admissible as input tax credit, unless the goods are sold within the Union Territory of chandigarh or are used for manufacture of taxable goods in the Union Territory of chandigarh for sale or are sold in the course of inter-state trade or commerce or in the course of export. Further, section rovides that iput tax credit, on the goods specified in schedule 'H' or the products manufactured there-from, when sold in the course of inter-State trade or commerce, shall be available only to the extent of Central Sales Tax, chargeable under the Central Sales Tax Act, 1956.It may further be noted that second proviso to Rule 22 Provides that the purchase tax paid under section 19 of the Act, shall be considered as input tax credit for the purpose of subsequent sale in the hands of same person.
Thus, it can be said that the credit of purchase tax is available subject ot the fulfillment of the conditions discussed hereinabove.
Further, Rishab the state was specifically asked so that the reply can be supported with the sections of the respective state instead of saying anything hay-way.
Hope the above suffice.
Comments
Rishabh Upadhyay
26-Dec-2011 , 04:28:36 pmFirstly the state is chandigarh. . And secondly will that affect if its from any state (local only) because i believe it to be a general rule. . Only confused if purchase tax is equivalent to mandi tax collected by local mandi or is a kind of sales tax. .
Rishabh Upadhyay
27-Dec-2011 , 12:08:29 pmThat was much needed help. . Thanks a lot. . :)