VAT INPUT TAX CREDIT

[MITSUI PRIME ADVANCED]

Dear Sir,

Good afternoon

Please  advice to us related to VAT .

we are using elevators/escalators ( used in warehouse ) in such cases we are receiving services from Kone Elevator India Pvt Ltd. Japiur. he is charing VAT in their Inv. in said caes we can avail VAT Credit.

:Nature of Service:- Works Contract Service - under Service

VAT at the rate of 14 percent on 40 percent of base value.

Pl.advice to us we can take credit of VAT (ITC)

Thanks for your co-operation in Advance.

Arjun Sachdeva

Mitsui Prime,

Neemrana

[rishi mohan]

In the above case vat credit shall be allowed and available. Credit shall be availed in capitalized nature instead of normal vat credit. The credit shall be utilised till 36 months (3 years).

AI Summary

VAT input tax credit for capital goods services must be capitalised and recovered through amortised input credit utilisation. VAT charged on works contract services for installation of elevators/escalators used as capital assets must be treated as a capitalised VAT input rather than a normal period input tax credit; the capitalised VAT is recoverable by systematic credit utilisation over the prescribed amortisation period.