VAT- Input tax credit
P.C. Joshi
(Querist) 15 April 2010
This query is : Resolved
Dear Friends,
A has three factories in U.P., Delhi and Haryana where it makes different ptoducts. It wants to make local sale of items manufactured in different states say certain items whch are being manufactured in U.P. and inetr state sales is being made at present to delhi and Haryana customers vice versa. Now in ordre to amek local sale it has to stock trasfer from one state to another state free of tax against form F. But as per Vat provisions in case of staock trasfer the inut credit avialed has to be proportionately reversed. I am not clear what is the extent of reversal of such input tax credit and on which amount it has to be considered specially in U.P. I have approached many advocates none of them could give me a staright forward answer. Somebody says it is proportionate to the total input cost credit availed on local purchases. Some other says that it will be fakt 4% of stock transfer amount and so on.
Can anyone clear this concept please.
regards
P.C. Joshi
Adv.Shine Thomas
(Expert) 17 April 2010
If goods transferred to outside the state for sale without support of Form F is not eligible for input tax credit.Otherwise it is eligible for input tax credit.
