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Home > Experts > VAT > Reduction in Vat Set-off
Reduction in Vat Set-off (VAT)
As per Rule 53 of the MVAT Act,2005 input Vat Paid Will be reduced to the extent of
4% on purchase of Furniture And Fixtures,Electrical Installations,Office Equipments.
However my Question is:
1)What all includes as Office Equipments?
(Give some comprehensive list)
2)Do computers,fax machine, printers, safes,air conditioners,mobile sets,etc
purchased for office use are to be termed as office equipments?
3)So,Vat paid @ 4% on computers purchased will not be available for Set-off?
4)Are there any amendments to this rule?
Set off rules have been amended to allow Vat on Capital Assets, which earlier were
under negative list such as
1. Furniture & Fixture
2. Electrical installation
3. Office Equipment
Vat Credit has now been allowed on Assets - "CAPITALISED after reducing 4% VAT
for the following
1. Furniture Fixture - 8.5%
2. Office Equipment - 8.5% (where Vat charged is 12.5% on such equipments)
Full Credit of Vat as under on Assets "CAPITALISED for the following
1. Plant & Machinery - 12.5%
3. Electrical installation - 12.5%
Capital goods if capitalised such as Computers and electrical installation having a Vat
Rate of 4% will not be eligible for VAT credit as reduction of 4% will render it "0
All changes stand effective from 08/09/2006
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