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Value Added Tax (VAT)

Value Added Tax (VAT) is a modern and progressive form of sales tax. It is charged and collected by dealers on the price paid by the customer. VAT paid by dealers on their purchases is usually available for set-off against the VAT collected on sales.

What is VAT?

Should I be registered for VAT?

How to register for VAT?

Keeping Records for VAT

Tax Invoices for VAT 

VAT : Composition Schemes

How to file a VAT return?

Claiming Set-Off for VAT 

Incentives under VAT

ST- VAT Advisory Visits

Claiming Transitional Relief

 
 
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VAT (Value Added Tax)
Claiming Set-Off for VAT 
Q What is set-off?
A Set-off is the amount of tax credit which can be claimed in the VAT return. It is the tax that you have been charged on goods that you have purchased for your business. This credit can be adjusted against the VAT payable on your sales, and the balance of VAT has to be paid to the Government.
Q Who can claim set-off?
A Any registered dealer who has not opted to pay tax by way of composition as a retailer, owner of a restaurant / hotel or a bakery owner.
Q Is set-off available under a composition scheme?
A No, except in the case of works contracts and dealers in second hand motor vehicles where special provisions apply.
Q Which taxes are available for set-off?
A You can claim set-off for taxes paid under: Maharashtra Value Added Act 2002, i.e VAT Entry for Motor Vehicles into Local Areas Act, 1987, i.e Entry Tax Entry of Goods into Local Areas Act, 2003, i.e Entry Tax
Q In respect of which goods can I claim set-off?
A Generally, you can claim set off for the full amount of tax paid on purchases for your business. This includes capital assets, goods the purchases of which are debited to profit and loss account, trading goods, raw materials, parts, components and spares, packing materials and fuel. However, there are conditions related to the set-off you can claim. The tax paid on some goods does not automatically qualify for set-off, and there are restrictions in some cases on the amount of set-off that can be claimed. Consult your tax consultant or Sales Tax Office for more details.
Q What are the conditions related to claiming set-off?
A The following conditions apply for claiming set-off: you must be registered for VAT you must not be paying tax by way of composition as a retailer, hotel / restaurant business or bakery. you must hold a valid tax invoice for the goods purchased on which you are claiming set-off in which the VAT must be shown separately you must maintain an account of all purchases in chronological order on which you are claiming set-off
 

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