setoff the purchase tax liability from W.C.T./T.D.S.

[Jasbir Uppal]

 

Dear Sir, 

A civil work  contractor case, T.D.S.  is being deducted at source by the contrecttee, applicant  purchased goods from unregistered dealers  which in turn used  in works contract and providing purchase tax liability in our books of accounts. The such contractor can setoff the  purchase tax liability from the WCT-TDS. Please also provided relevant apex court ruling 

[YAGAY andSUN]

It is not allowed.

[Jasbir Uppal]

 

Even the Definitions  of section 2(p) of UPVAT act set off the  purchase tax liability from the WCT-TDS is not allowed section 2(p) coated here under:-

2(P) “Input tax”, in relation to a registered dealer who has purchased any goods from within the State, means the aggregate of the amounts of tax – (i) paid or payable by such registered dealer to the registered selling dealer of such goods in respect of purchase of such goods and (ii) paid directly to the State Govt. by the purchasing
dealer himself in respect of purchase of such goods where such purchasing dealer is liable to pay tax under this Act on the turnover of purchase of such goods.
‘Tax’ – means a tax leviable under this Act, on the sale or purchase of goods other than news papers; and shall include, - (a) tax or lump sum as the case may be payable, in lieu of actual amount of tax due on turnover of sales, in accordance with provisions of Section 6; or
(b) Amount of reverse input tax credit, Difference between the tax and input tax is minute as – ‘Tax’ means a tax leviable under this Act on sale or purchase of goods (both) while ‘input tax’ is aggregate amount of tax, paid or payable by registered dealer to registered dealer and paid directly to the State Govt. on purchases of goods only.

 

Ple. advised

 

With regards

 

(J.S. Uppal)

 

AI Summary

Setoff of purchase tax against withholding tax is not permitted; input tax credit is confined to purchase tax paid to sellers or State. Setoff of purchase tax liability against WCT/TDS by a civil works contractor is not permitted because statutory input tax is limited to tax paid or payable to a registered selling dealer and tax paid directly to the State on purchases, whereas purchase tax recorded in the contractor's books does not qualify for credit against withholding obligations.