Reversal of ITC for CST SALES., under TNVAT

Dipak gupta (Querist) 15 November 2014 This query is : Resolved
Sir,

I am a dealer of iron and steel code 2041, which is declared goods under CST act,

Does a dealer needs to reverse ITC of 3% for the CST Sales made.

Please clarify.

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KUMAR JAGADEESAN (Expert) 16 November 2014
Dear Mr.Gupta

I understand from your query that you had paid VAT while purchase of goods within the State, If subsequent sales are made within the state you have the benefit of ITC. However if the subsequent sale is made interstate then also the credit is still available as CST sale is zero rated sales in terms of VAT Act. There is no need to reverse ITC already availed on input purchase and you can utilise the ITC for payment of CST liability

J.KUMAR
Advocate
HYderabad

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