ITC on goods purcahsed locally and transfered to branches

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Nitesh Bhandari

Ca Finalist Articled Trainee

125 Points Posted on 25 June 2010

Hello All,

My query is w.r.t. TNVAT

Suppose a person has a HO @ Chennai and purchases goods locally from registered dealers and proper Vat bills and thereafter he transfers the goods to other state (Say Kerela) to his branch and thereafter the goods (Form F) are sold in kerala. Can HO claim the input and is there any restriction on the % of input i.e., maximum of 4 or 12.5%

Thanks In advance

Nitesh

Replies (2)

Nitesh Bhandari

Ca Finalist Articled Trainee

125 Points Posted on 28 June 2010

Originally posted by : Nitesh Bhandari
	Hello All, My query is w.r.t. TNVAT Suppose a person has a HO @ Chennai and purchases goods locally from registered dealers and proper Vat bills and thereafter he transfers the goods to other state (Say Kerela) to his branch and thereafter the goods (Form F) are sold in kerala. Can HO claim the input and is there any restriction on the % of input i.e., maximum of 4 or 12.5% Thanks In advance Nitesh

Vishal Jain A

Practicing CA

717 Points Posted on 03 July 2010

Hello

No ITC will be allowed on its purchases of goods which are sent for consignment sales or to branches to other states.

Though a provision has been suggested in the white paper that the restriction is only applicable up to the tax paid on 4% rate and if tax is paid @ 12.5% then ITC will be allowed over and above 4% of the tax i.e. 8.5% of the purchase price of goods will be allowed as ITC but if the tax paid is only 4% then No ITC will be allowed.

Have a great day.