CST Liabilitity payment adjust in VAT input

[G.Narayanan Ganapathy]

Dear Sir/Madam

I am working scarp company in Tamilnadu.

I am purchase of scrap in CST Purchase and VAT Purchase.

Sales in CST High with compare to VAT Sales.

VAT Purchase in High so the Input available.

CST Sales Liability adjusted in VAT Input is correct or not.

CST Sales Liability for tax paid only.

Clarified the any notification or circular given for future reference.

[YAGAY andSUN]

Dear G Narayanan,

You can avail the Input Tax Credit on purchase of goods within State and you may utilized this ITC to adjust the outward liability due to Intra State Sales and Interstate Sale.

But there would not be any benefit of ITC available on CST purchase.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Input Tax Credit limitations: CST purchases do not generate VAT input credit, only intra state purchases qualify for ITC. Input Tax Credit is available only for purchases made within the State and may be utilised to discharge outward VAT liabilities for intra state and inter state sales; purchases subject to CST do not generate VAT input credit and cannot be used to reduce VAT outward liability.