Financial Daily from THE HINDU group of publications
Monday, Mar 14, 2005
Financial Daily from THE HINDU group of publications Monday, Mar 14, 2005 |
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Industry & Economy
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Taxation `Delhi VAT law unclear of tax credit on capital goods' K.R. Srivats
New Delhi , March 13 THE Delhi Value-Added Tax (VAT) legislation was less than clear as to whether a lessor would be entitled to claim tax credit on the capital goods purchased by him and leased out to any user (lessee), according to Mr Satya Poddar, Partner, Ernst & Young. The Delhi VAT allowed tax credit on capital goods to be availed in full, but over a period of 36 months. Mr Poddar held that there was no clarity on whether the lessor or the user could claim the VAT credit on capital goods. Speaking at a seminar on "Preparing for Delhi VAT," organised by the PHD Chamber of Commerce and Industry (PHDCCI), Mr Poddar at the same time praised the Delhi VAT law for it was one among the few State laws that provided for a refund mechanism. "Most of the States have opted for carry forward route. Even very few countries have the refund system," he said. The VAT expert also held that the composition scheme was quite "draconian" as it came with a number of stipulations including no input tax credit. He pointed out that the scheme does not allow a dealer to procure any goods from outside Delhi as well as from any unregistered dealers within the State.
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