Interstate sale input credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2012 in case of inter-state branch stock t/f there is no liability for CST and we can take the credit of input at its original rate eg. if paid 4% paid on purchase then we take 4% credit.

And in case of inter-state sale we have to pay CST @2%.

now Question is that if we pay CST @2% even then we have to reverse the 2% credit on purchase? (i.e. we are losing 4%, 2% as reversal on input credit & 2% which we paid)

Ankit Varia

Ankit Varia (Expert)
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10 August 2012 1. If the goods are transferred outside state (interstate branch transfer) then retention is applied on corresponding purchases as per Rule 53(3) of MVAT Act.

2. If interstate sales have been made, then full set-off on corresponding purchases can be claimed. (exception being Rule 52A)

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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10 August 2012 Mr Author,
If interstate sale is made with 2% CST,then there need not be reversal of input as it happens for branch stock transfer.....MJK