Claiming Input tax rebate in case of transportation service was not valid until 2020.In Finance Act 2020, Provision for input tax claim was revised to the new law. In this scenario, cost against transportation service can be claimed as rebate on 80% of input value (Ref. Section 46(2)(d) of VAT & SD Act 2012). Transportation services are defined in Section 5 of 2nd part of the first schedule. Transportation services include:
1. Air conditioned bus
service.
2. Air conditioned
launch service.
3. Air conditioned
Railway service.
4. Vehicle rental
service.
5. Shipping agent.
6. Freight forwarder.
7. Transport
contractor
8.Courier service.
9. Chartered
Helicopter service.
10. Chartered plane
service.
11. Ambulance service (Except
Patient and Dead Body Carrier Ambulance service).
These
services are defined in SRO No-186/law/2019/43-MUSHAK, Dated: 13th
June 2019.
So, if this
transportation costs are incurred as input, Person can claim 80% of input value
as input tax.
Example:
|
Particular |
Value |
VAT |
Claim
on VAT return |
|
Total Sale |
100,000 |
15,000 |
15,000 |
|
Input: |
|
|
|
|
Machineries |
30,000 |
4,500 |
-4,500 |
|
Transport Cost (Rebate 80%) |
20,000 |
3,000 |
-2,400 |
|
Increasing Adjustments (Transportation Cost 100%) |
20,000 |
3,000 |
3,000 |
|
Decreasing Adjustments |
|
|
|
|
|
|
Net
VAT Payable |
15,600 |
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