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 

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.