How to file vat for same company name in two states?

VAT (Legacy) 372 views 3 replies

Sam

Others

24 Points Posted on 22 July 2015

Hi All,

I've registered 2 proprietorship firm in Tamilnadu and Karnataka under same company name. In tamilnadu i'm manufacturing and in karnataka i'm distributing. I'm purchasing product from my own company in tamilnadu and selling in karnataka. I'm filing VAT every month. Ex: my product price in tamilnadu is Rs.100(including 5% VAT). I'm purchasing it in Karnataka and selling it for Rs.200(14.5% VAT for packaged food). Totally as a company i'm paying 5% in TN + 14.5% in KA. But i'm getting returns from people as 14.5% in KA only. Is this right? Am i not loosing 5% here? how to handle it?

Replies (3)

CA Suri Kota

Assistant Manager @ EY

955 Points Posted on 22 July 2015

Hi,

When you purchase the product from Tamilnadu from Karnataka, you wil end up paying CST which you can not utilise to set off the VAT Payable in Karnataka.

The CST you paid on tamilnadu purchases will be going to Tamilnadu govt which proves that you can not get the benefit of set off with taxes payable in Karnataka.

Thanks.

Suri

B.N.Dharmendra

Senior Manager Indirect Taxation

136 Points Posted on 23 July 2015

In your case you can purchase the product from TN against Form-C @ 2% since both the companies are registered with ST Dept. and sell it in Karnataka for 14.5%. ( but my question is the products in TN 5% how it will be 14.5% in Karnataka may i know the product name, generally all items which are considered luxury is charged @ 14.5%).

In TN interestate purchase CST-2% you can avail as Input Tax Credit, pl. check in Karnataka whether it's allowed, if allowed you can adjust against the VAT payable.