Under Sec.19(4) 0f TNVAT Act, it requires reversal of ITC upto 5 percent in respect of transfer of goods interstate for resale or manufacturing. Kindly clarify if this provision is applicable for the goods listed in Part A of First Schedule where vat rate applicable is 1 percent , say, semi-finished diamond jewellary items sent to Branch in other state for finishing process.
- shekar r
Clarification sought on ITC reversal under Section 19(4) TNVAT Act for interstate transfers of goods with 1% VAT rate. A query was raised regarding the reversal of Input Tax Credit (ITC) under Section 19(4) of the Tamil Nadu Value Added Tax (TNVAT) Act, which mandates a reversal of up to 5% for interstate transfers of goods for resale or manufacturing. The question sought clarification on whether this provision applies to goods listed in Part A of the First Schedule, where the VAT rate is 1%, such as semi-finished diamond jewelry sent interstate for further processing. A respondent inquired if the issue had been resolved, indicating ongoing discussion or need for further clarification. (AI Summary)
TaxTMI 
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