Reversal in put tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2014 sir,
we hereby briefing our interstate sales made in the month of oct, 14 from coimbatore tamilnadu to new Delhi, our products attract local tax at 5% and we have cleared our final product to party at new Delhi without C form at the rate of 5% CST. the translation has been completed from our side.
further while submission monthly return we forced by the Commercial Tax department that we have to reverse the ITC credit availed for that much value or quantity which we have cleared as interstate sales without C form even though payment of full rate of tax this as per Tamilnadu value added Tax rule 2006.
In this transaction we looser both side so kinldly of confer me your leagle openinon & logic of the applicalble rule.
Thanks

Vishnu Saboo

Vishnu Saboo (Expert)
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12 December 2014 reversal of ful ITC is not logical, however, in some states they have issued notification that in case of interstate sale you need to reverse ITC @ 2% or whatever they set for.
but this too is not @ 2% on whole of sales amount, you need to work out in what ratio your purchases is and what is ratio of ur OUTSIDE state sale.

Vishnu Saboo

Vishnu Saboo (Expert)
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12 December 2014 you need to check your local sales tax law whether dept have issued such notification or circular for it.

Querist : Anonymous

Querist : Anonymous (Querist)

13 December 2014 Sir,
Still we want to know that if we are sales in the rate of 5% CST then we are elegible for for ITC reversal

Vishnu Saboo

Vishnu Saboo (Expert)
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08 January 2015 yes, you have to reverse. this seems sort of levy by state Govts to discourage CST sales.
as far as concern to my state law, yes we need to reverse.
better to take a look of ur state law to conclude.

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