Pre-registration Purchase in Karnataka-Vat Implications
Many traders come with this querry of pre-registration purchase. Here is the extract of The Karnataka Vat Act, 2003 regarding this issues with explanation.
"Deduction of input tax credit shall be allowed to the registered dealer, subject to the restrictions of section 11, in respect of tax charged to him by a seller on taxable sale of goods made to him for the purpose of business within three months prior to the date of his registraiton provided that no input tax shall be allowed in respect of goods which have been sold or otherwise disposed of prior to the date of his registaration."
Input credit can be taken on good purchased within 3 months prior to registration. But input can not be taken on goods which were sold/disposed before registration but subject to restriction of section 11.
Yes, Its applicable to capital goods also. But capital goods should be directly related to business operations.