Input credit reversal on stock transfer

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Deepak Birla (Querist)
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30 June 2011 Pls. clarify

We have our Manufacturing unit in Bangalore
& other branches all over India.

Under KVAT We buy goods(including Fuel)
@ 4%, 12.5%, 13.5% & part of the stock will be sent to other branches as stock transfer against Form-F.

1. Whether We are eligible for taking input credit on purchases fully or if not than how much input tax we have to reverse against stock transfer.
2. If so pls. give the relevant section & rule details.

Plz reply me soon.
Thanks

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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19 July 2011 Mr D Birla,
Subsec 5 & 6 of Sec 11 of KVAT Act 2003 mention this point.You can take the credit of input tax paid on purchases made for manufacturing goods sold in Karnataka,interstate sales(from here),or exported(from here).You can not take credit of I/P tax paid:
1)on purchases used for manufacturing products despatched as stock transfer to other branches,
2)on purchases directly desptched outside the state on stock transfer,
3)on fuel used for motor vechicles,but fuel used for captive generators,and other production purpose.
MJK

Deepak Birla

Deepak Birla (Querist)
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20 July 2011 Mr MJ Krishnamurthy

Thanks for your reply.

Plz also read sec 14 of KVAT Act 2003 than reply.

Thanks

Deepak Birla

Deepak Birla (Querist)
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20 July 2011 Mr MJ Krishnamurthy

Thanks for your reply.

Plz also read sec 14 of KVAT Act 2003 than reply.

Thanks

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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20 July 2011 Mr D birla,
Sec 14 of KVAT Act 2003 deals in special rebating scheme.This is about apportioning the input tax paid on certain purchases into eligible and non eligible parts in the ratio of utilisatioin and claiming the eligible amount only. Suppose you have purchased deisel for Rs10,000/- in a month and paid Rs2000/- as VAT on it.Out of this puchase you have utilised deisel of value Rs2,000/- for your own vechicles and the rest (i.e.of Rs8000/-) for captive gen set.Then you can claim Rs1600/-only as input tax. In the same way in the other items listed above are also to be calculated.
MJK

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