VAT CST ADJUSTMENT

[Sajid Ahmed]

Please solve this, how much tax to be payable:

Purchase from URD for Rs.5,00,000

Purchase from RD   for Rs.1,00,000

Sales against C Form for Rs.10,00,000

Sales VAT 14.5 percent        for Rs.1,00,000

Exempted Sales        for Rs.50,000

Please guide how to calculate ITC and tax payable.
 

[YAGAY and SUN]

You would have to pay tax on Rs. 50000/- as these are exempted sales and you can avail the Input tax credit on purchase from RD provided purchases from URD is used in manufacturing of finished goods are sold on payment of VAT/CST.

AI Summary

Input tax credit eligibility clarified: tax due on exempted sales; credit only for registered-supplier purchases used in taxable sales.
Tax is payable on the value of exempted outward supplies identified in the query. Input tax credit is available for purchases from registered dealers; purchases from unregistered dealers may support credit only if the goods are used in manufacturing finished goods that are sold on payment of VAT/CST, and credit otherwise depends on compliance with statutory conditions.