u/s 12 TNVAT Act Purchase tax on raw leather

[THYAGARAJAN KALYANASUNDARAM]

Dear Expert,

One of my client is manufacturer of finished leather goods and supplying to various clients located intra & inter state. For which they are procuring the goods from regd. dealers as well as unregd. dealers. My question is whether my client is liable to pay purchase tax on raw leather which is purchased from open market from the individuals.

Now the assessing authority has passed the order and demanding the tax on purchases made from un regd. dealer u/s 12 and same will not be adjusted against any other output liability due to time limit for claiming the Input tax credit barred as per sec 19(11) of the TNVAT Act'2006.

Kindly help us by quoting any of the case law defending these issue.

[Ganeshan Kalyani]

Yes purchase tax will have to be paid if the purchases are from unregistered dealers.

AI Summary

Purchase tax liability on raw leather applies where purchases are from unregistered dealers, restricting input tax credit claims.
Purchase tax is payable on raw leather purchased from unregistered sellers; the assessing authority demanded tax on open market acquisitions and the purchaser cannot adjust that tax against output liability where the statutory time limit for claiming input tax credit has lapsed. Expert advice in the file confirms purchase tax liability for purchases from unregistered dealers.