Notice Received for Branch Transfer

[Asked by 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.

AI Summary

Input tax credit reversal: branch transfers require prescribed forms and apportionment, with different treatment if interstate transfers lack certificate.
Input tax credit on branch transfers requires prescribed documentary proof for goods covered by central sales provisions; absent such proof or for inter state supplies without the requisite form, ITC reversal is triggered. Reversal is calculated by apportioning total ITC to the value of stock transferred (ratio of stock transfer to total sales) and applying the applicable reversal percentage based on presence or absence of the statutory certificate. No reversal is required where transferred goods were not purchased under the VAT regime.