Input tax credit

[saket s]

Dear Sir,

Whether input tax credit of VAT is available in case of penultimate sales under Punjab VAT?

[YAGAY andSUN]

Dear Saket,

You may get refund of ITC on penultimate Sales under PVAT Act,2005. VAT Refund usually arises to the exporters or the person doing penultimate export i.e. sales against H forms, due to the fact that the export of goods outside India is considered as zero rated sales i.e. not liable for any vat liability and the tax paid on purchase of goods which are to be exported is refunded to the exporters as per provisions of section 18(2) of PVAT act 2005.

As per section 39(1) refund under PVAT Act may be granted either by way of refund voucher or at the option of the person claiming refund by refund adjustment order.

Section 39(2) provides that if any refund is due to a taxable or registered person according to the returns filed for any period, such refund may be adjusted provisionally against the tax due and payable as the returns filed for any subsequent period.

This is for your kind information.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Refund of Input Tax Credit Possible for Penultimate Sales Under Section 18(2) of Punjab VAT Act 2005 A query was raised regarding the availability of input tax credit (ITC) for VAT in penultimate sales under the Punjab VAT Act. The response clarified that a refund of ITC is possible for penultimate sales under the PVAT Act, 2005. This typically applies to exporters or those involved in penultimate exports, as such sales are zero-rated and not subject to VAT. The tax paid on goods intended for export can be refunded under section 18(2) of the PVAT Act. Refunds can be issued via voucher or adjusted against future tax liabilities as per sections 39(1) and 39(2).