Dear Sir,
Suppose a company is purchasing raw material locally say Rs. 100000/- by paying VAT 5% i.e Rs. 5000/- and taking credit of the same. Suppose he manufactures goods worth Rs. 500000/-. With this material he sells goods worth Rs. 100000/- as local sale and and charge 12.5% as VAT (i.e 12500/-) and remaining transfer as stock transfer. Can he adjust the VAT paid against the VAT credit available with him? Also please clarify whether he has to reverse the proportionate input tax credit alreday taken? Will there be any change in scenerio in case the remaining goods are transfered on CST rather than stock transfer?
Regards
vinod Raina
CAclubindia
