Reversal of ITC

[Guest]

Dear All,

Dealer registered under Tamilnadu VAT Act has received notice from assessment circle proposing them to reverse ITC on goods stock transferred to other States, under Section 19(4) of TNVAT Act. While provisions exist for reversal @ 5%, stand taken by the department to reverse ITC on entire amount (not only locally purchased goods, which are stock transferred) appears to be incorrect. I request views/Circulars/Case laws which support this view that ITC reversal is to be done only for goods which are locally purchased by the dealer and not entirely. Also, any precedents on this will help! Thanks.

AI Summary

Dealer Challenges ITC Reversal on Entire Stock Transfer Under TNVAT Act Section 19(4), Seeks Support for Local Purchases Only A dealer registered under the Tamil Nadu VAT Act received a notice from the assessment circle proposing a reversal of Input Tax Credit (ITC) on goods stock transferred to other states, as per Section 19(4) of the TNVAT Act. The department's stance is to reverse ITC on the entire amount, not just on locally purchased goods. The dealer seeks opinions, circulars, case laws, and precedents supporting the view that ITC reversal should apply only to locally purchased goods, rather than the entire stock transferred.