Input vat on f form transaction

Others 1282 views 3 replies

llllVICTORllll

Internal Auditor

511 Points Posted on 14 August 2012

My Doubt is, if a company is purchasing Material locally(in my case karnataka), manufacture a finished goods, Transfer the commodity to other states under F Form, and the same is sold in those state.

MY Question

IS input VAT credit available in full to the manufacturing company? or is there any calculation for reduced claim of input??

If Full input available, isnt the local govt under loss of revenue and other state government making a very big gain of revenue as they save on input but get full payment on VAT?

or is sale after Transfer through F Form, be done only under CST rule, where only central govt is benefitted and states share the benefit??

Hope all my queries are solved

Replies (3)

RENGARAJ R.K

ADVOCATE

7557 Points Posted on 16 August 2012

After availing the input tax credit if a Dealer transfers (against F Form) taxable goods outside the State of Karnataka is required to reverse the credit upto 2% of input tax paid availed on loaal taxable purchases made within the State.

Whereas if he sells the material to outside the state against C form, there is no reversal.

Full input is available to the dealer if he uses/sells/consumes within the state of karnataka.

Please state share is there for CST sales also.

RENGARAJ R.K

ADVOCATE

7557 Points Posted on 16 August 2012

What is the rate of tax of your product transferred to other states?

llllVICTORllll

Internal Auditor

511 Points Posted on 16 August 2012

Our goods are sold all over india every state in india... But Manufacture happens only in Few states off which Karnataka is one of main Manufacturing Unit.

So goods are manufactured in Karnataka, and Sent to Godowns and Consignment Agents at different parts of country under F Form.

And they may or maynot sell in Locally or interstate which depends on orders.