An manufacturing assessse had made both local as well as interstate purchases and sales.In addition to this he used to transfer a portion of goods to branch outside state as Interstate stock transfer which will comes around only 15-20% of Total Turnover.Out of total purchase made major portion is from interstate purchase.
The Commercial Tax Department argued that there is interstate stock transfer and they will restrict a portion of input tax claimed on local purchases.
Can assessee counter argue that since he had made interstate purchases more than local purchase on which no cst credit credit is not allowing to set off against vat why should he reverse input tax credit claimed on local purchases since he made inter state stock transfer which is only a small % of his total turnover and the he made sufficient interstate purchases to cover the entire stock transfer .
Let us assume the following figures
Total Turn Over - 21 Crs
Local Sales - 17 Crs
Interstate Sales - 1 Cr
Stock Transfer - 3 Crs
Local Purchase - 3.50 Crs
Interstate Purchase- 9 Crs
Whether he is required to reverse the input tax credit according to Commercial Tax Dept,Please advice?
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