Input Tax - CiteHR
Saswatabanerjee
Partner - Risk Management
Jeevarathnam
Sr. Manager Hr/admin
Ranjini2ranju
Accountant
+2 Others

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Hi All, Please help me in dis......
I am working for Service Entity.... we have purchased Furniture for office purpose, in this tax Invoice they have Charged us VAT of Rs-23000/-
Can i claim Input tax under Service Tax Because We Do not File Sales Tax ? what happens if we have file Sales Tax also ?
And Please Correct me if i wrong i have passed entry in our books
Furniture a/c dr xxx
Input Tax ac dr xxx
to Sundry Creditor xxx
sundry creditor a/c dr xxx
to bank xxx
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Hi You can’t take purchase bills for input of service tax. For service tax you should treat only service input and not sales tax input.
hey. If you are using the material for resale or as raw material then only you can take. else you can’t. If anything u can call me
Since the purchase is for own use, the firm is not entitled for availing Input Tax Credit.
The entries seems fine provided Furniture a/c includes Input Tax also (ie capitalizing total cost to Furnitue a/c).
Please consider followings:
1 You should have Service Tax registration. (If your GP exceeded 9 lakhs, company should be taken registration from Commssnr. of Central Excise Service Tax cell)
2. IF any Capital goods purchase, You should take permission from Service tax authority through official letter and state the detailed requirements for fixed assets (CG: Capital goods).
3. Once you get approval, you can file half yearly return under form No ST3 and claim the CGIT subject to the approved percentage in a year)
Your book of entries are correct but you should create a ledger for CGIT insteadoff IT A/c and rectify accordingly.
(The above information for only service sector only)
Regards
Yethee,
yetheey@eim.ae
India and Middle east.

Hi ranjini
If you are liable to service tax, you can claim a set off / cenvat (I out tax credit) only on service tax paid on any of your purchases of services. The vendor / service provider must have service tax registration and also must have charged service tax specifically shown in the invoice.
Sales tax / vat can not be set off against service tax. Excise duty, however, if specifically provided, can be claimed in cenvat
So to that extent your entry also is wrong as you can not charge part of the cost to input tax
you have to treat as asset for office use and should not take input credit because its capitalization of asset.
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