TNVAT - ITC reversal

[venkat eswaran]

Dear Experts,

Under TNVAT there is ITC reversal introduced from OCt-2013 Some companies are doing ITC reversal everymonth. But the case was filed by TVS and some companies against this ITC reversal.

we are mfg unit and we have paid initially 2 months. but after feb14 we have not paid. The Liability is going up as on date. Sales tax dept also not issued any notices for non-payment of ITC reversal.

Whether we can pay or delay it ? your advice please

Venkat

AI Summary

Input tax credit reversal under TNVAT: obligation to reverse may persist despite litigation and absent departmental notices. ITC reversal introduced under the state VAT regime requires periodic reversal by registered taxpayers; some pay monthly while others have litigated the reversal mechanism. A manufacturing unit paid initial reversals then stopped, accruing liability without receiving departmental notices. The operative issue is whether the unit must continue timely reversals and discharge accumulated reversal liabilities despite pending legal challenge and absence of departmental demand, considering statutory reversal obligations, possible enforcement suspension during litigation, and risks of interest or penalties for non payment.