Input Tax means which a dealer pays on purchases.The Input Tax can be utilized in following dealings:-
- Input Tax can be utilized to adjust the output vat against any Local sales.
- Input Tax can be utilized to adjust any Central Sales, Export Sales
- Input Tax on purchase of Machinery which is purchased for production of goods for sale, also can utilized for above transactions.
- Input Tax can be utilized to adjust the output tax charged on sale of any scrap or machinery
THE PURCHASES ON WHICH A DEALER CAN NOT CLAIM A CREDIT OF INPUT TAX
A dealer can not adjust the Input tax against the following purchases:-
- Automobiles, including commercial vehicle, unless you are in the business of dealing in such automobiles.
- Spare parts for repair and maintenance of automobiles unless your business is dealing in such automobiles;
- Petroleum products unless one is dealing in petroleum
- Goods used for personal consumption or gifts;
- Air-conditioning units unless you are in the business of dealing in such units” etc.
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