VAT on Fixed assets

[Guest]

Can i claim VAT on Fixed assets or i have to add back to Assets.

[CA Rachit Agarwal]

Claiminng of Input VAT Credit on Fixed Assets depends on the State VAT Law. Various states has its own way of allowing credit to the assessee. Further it also depends on the direct or indirect use of the Fixed Assets.

AI Summary

Input VAT credit on fixed assets depends on state VAT law and whether assets are used for taxable activities. Whether an assessee may claim Input VAT Credit on acquisition of fixed assets depends on the relevant State VAT statute and its implementing rules, with States varying in approach: some permit credit subject to conditions, others prescribe pro rata mechanisms or disallow credit and require VAT to be capitalised. Availability often turns on whether the asset is used in the direct furtherance of taxable supplies or for indirect or exempt activities.