20 July 2011
Dear Sir, my client sell fireworks crackers(taxable @ 12.5% now 14.5%) to other states against C form with 2% and without C form ie.unregistered dealers @ 12.5%. In monthly return filing i am taking the reverse credit for material sold to other state unregistered dealer. and adjusted the tax payable on the sale with the ITC available. But now the assessing officer said that u can't adjust the amount with ITC and it should be paid. So kindly clarify whether the amount is adjust with ITC available or not. If there is any clarification regarding this matter please send me. my mail ID is kalkimani@yahoo.co.in
20 July 2011
ITC is available under VAT only, not under CST
reverse credit means what? you have either to pay CST or adjust the CST liability with vat credit available which is generated with local vat purchases.
for restrictions on vat input credit, please follow your state vat schedules, may be your inputs are not qualifiing the input credit norms
21 July 2011
Against CST no adjustment is permitted and hence you are wrongly adjusting ITC. Thew assessing Officer is correct. So pay without dispute the tax otherwise your assessment for previous years might also be re-opened.
CAclubindia
