Can input tax credit be claimed on stock of goods on the date of implementation of VAT, i.e. closing stock on 31.03.2005?
Since stock of goods on the date of implementation of VAT, will be liable to VAT on sale from that particular date, the tax paid under the present sales tax will be eligible for input tax credit subject to conditions and restriction as may be stipulated in the respective state VAT act. However, The general condition for the treatment of opening stock as on the date of implementation of VAT is as under: 1. All sales tax paid goods purchased on or after April 1, 2004 and still in stock as on 01.04.2005, will be eligible to receive input tax credit subject to submission of requisite documents. 2. Resellers holding tax-paid goods on April 1, 2005 will be eligible for tax credit. 3. VAT will be levied on the goods sold on and after 01.04.2005 and input tax credit will be given for the sales tax already paid in the previous year. 4. This tax credit will be available over a period of 6 months after an interval of 3 months (needed for verification).
