Qeuries about "Gujarat VAT" input credit

This query is : Resolved

vishnukant (Querist)
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02 September 2008 hello all, i have some queries about "Gujarat VAT" input crdit which to be solve. i am working in a manufacturing company, and recently i got involved in Sale tax matters of my company and our first VAT assessment is under process. as the VAT act is new for all us many confusions are there, following are some queries which has to be solve at earliest.
1. first query about Branch transfer, as per VAT act there is provision of 4% reduction in ITC on "taxable turnover of purchases within state." the assessing officer is saying that we have to reduce 4% on whole taxable purchases within state i.e. my taxable purchases is 1000 and BT is there 50, then he suggested to reduce rs. 40 from ITC instead of Rs.2, is that correct? as language of Act compel to obey him but logic not allow to do so. further i observed that my most of BT is purchases of OGS and Manufactured Scrap (i.e. imported or CST purchases) hence i didn't availed ITC on most of items, is there need to reduce the ITC by 4%.further as per assessing officer BT is BT whether it is outside state or within state and you have to reduce 4% necessarily(pl note that we have three units within Gujarat and having seperate registration no for each.)
2. the second objection was for SCRAP sale to third party, as there are a few categories of scrap defined in schedule and list of commodity Scrap made from non-ferrous metal and alloye,Scrap of non-ferrous metal and alloy,Iron scrap, rubber scrap. but scrap may arise from anything used in plant i.e. empty drum, waste and used lubricants & oil, empty tins, wooden wastes, HDPE scrap..etc. i want to know how to apply the tax rate on any scrap?
3. the assesing oficer objects for ITC on store cosumables i.e. Ball bearing, nut bolts, grease & lubricants. as it comes under "processing matarials" can we avail the same? further we have to use the LPG and oxygen for cutting and welding, he treat this as fuel and advised to reduction of 4% as per sec 11(3)(b)(iii).
i know that it will take your a lot of time, but you are requested pl help out me. Thanks

Rohan Desai

Rohan Desai (Expert)
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12 March 2013 Proportiante ITC shall be reduced under branch transfer.

Miss Scrap to be charged at 12.5+2.5

ITC of consumable stores is avaliable in manufacturing process.

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