Notional ITC
Jatinder Chugh
(Querist) 22 January 2011
This query is : Resolved
I am a regd dealer under PVAT Act and have bought cement from exempted unit and also from dealer who is taxable at first stage and issued me a retail invoice. Now my questions are 1) Can i claim notional ITC @ 4% on purchases from exempted unit. 2) Can i claim ITC on purchase made from the dealer 3) I am issuing retail invoice to persons other than taxable person. 4) Can i claim notional ITC on Total purchases made in a quarter or it would be proportionate to the sales made in that quarter. 5)What would be better for me to claim notional ITC or reduce purchase value of goods sold and pay vat on value addition only.
JITIN KOHLI
(Expert) 23 January 2011
look! as i understand from u r question is you deals in retail trade of cement and purchases some goods from exempted unit and also from a dealers who issues u retail invoice, u cannot claim the itc in exempted units but in purchase from other dealer u must have a invoice valid for input tax credit to registered dealers instead of retail invoice, and u can claim ITC on total purchase made in the quarter no need to bifercate as per the sale made and the stock left. u know our VAT system allows u to carried forward u r VAT the amount of vat payable on profit margin will first be settle down from ITC in stock left for sale and if yet output VAT comes in excess then you will have to make the payment, not only upon the stock sold in the quater but also upon the stock left, subject to settlement with ITC with u in the subsiding quarters.
JITIN KOHLI
ADVOCATE
PUNJAB & HARYANA HIGH COURT, AT CHANDIGARH
Email:-legalsolutionsambala@gmail.com
H.M.Patnaik
(Expert) 03 February 2011
Rightly said Mr. Jitin, on exempted purchases under VAT act , no INPUT Credit is available to the Purchasing Dealer. Whatever purchases are made by the dealer only on the basis of Tax Invoice during a Tax period , corresponding value of Input credit is to be claimed during that Tax period. However, if any Input Credit still remains un-adjusted in that Tax perod , there is provision under the VAT act to carry forward the same to the subsequent period.
