Notice Received for Branch Transfer

[Guest]

Sir,

We have received notice for branch transfer for that we have not paid reverse credit. In that notice they have metioned the value but we need to know how they arrived that value. We need formula & example also. Our branch transfer was inter state.

[YAGAY andSUN]

Rule 10.(9( (b) of the TNVAT Rules

Input tax credit

 9 (b) Input tax credit on transfer of goods falling under section 6-A of the Central Sales Tax Act, 1956 shall be allowed only if Form F prescribed in the Central Sales Tax (Registration and Turnover) Rules, 1957 is filed.

[Ravikumar muthusamy]

In tamilnadu earlie it was 3 percent of ITC portion on Stock transfer value means if ITC is Rs.1000 and total sales value  is 10000 and stock transfer is 5000 ITC reversal amt calculation is

   1000/10000 * 5000 = 500 * 3/5 or 3/14.5 based on vat rate.

Now it is 5 percent on Stock transfer or interestate sales without C form and 3 percent on cst with c form.

It is to be noted that if the stock tranfer or cst sales are not made out of vat purchased goods no need to reverse ITC

AI Summary

Clarification Sought on Valuation Method for Branch Transfer; Input Tax Credit Rules and Rates Explained Under Central Sales Tax Rules. A party received a notice regarding branch transfer without paying reverse credit and seeks clarification on the valuation method used. Two responses were provided. The first response explains that input tax credit on inter-state transfers is allowed only if Form F is filed under the Central Sales Tax Rules. The second response details the calculation of input tax credit reversal, stating that it was previously 3% on stock transfer value and is now 5% on interstate sales without a C form and 3% with a C form. No reversal is needed if transfers are not from VAT-purchased goods.