TNVAT ITC reversal for CST 2% sales - VAT - CST - GST

[Guest]

Dear All

ITC Reversal of CST sales formula given by our CTO is =(ITC*cst sales/total sales )*(3/5or 14.5 applicable). in My doubt is Total sales = 5%+14.5%+Export sales+ CST 2% sales is it correct ? and

Our CST Sales included own manufacture sales products + imported traded item. while taken of CST sales of ITC reversal whether i will taken both or only manufacture sales

i request pls provide the reply

[Rangarajan DV]

Hi Selva

Total sales means all sales including VAT + CST + Export sales. If you have sales of both own manufactured and traded goods, ITC reversal is required to be done only for manufactured goods since input tax credit is availed on the goods bought within the State of Tamilnadu, and used in the manufacture within the State. Accordingly, the denominator (i.e. Total Sales) and CST Sales on which ITC reversal to be made, should show only manufactured goods and not both.

Hope you are clarified.

[Guest]

Thank you sir. Now I got clarity

Regards

selvakumar.J

AI Summary

ITC reversal for CST sales requires adjusting input tax credit only for manufactured goods based on all-sales denominator. The proportional ITC reversal formula uses total sales including VAT, CST and exports, but both the denominator (total sales) and the CST-sales numerator must be limited to sales of manufactured goods; where a dealer sells both manufactured and traded imported items, ITC reversal is required only for manufactured goods because ITC is claimed on in-state purchases used in manufacture.