Vat treatment

[pardeep bisht]

in case of Loan License materials are supplied by party. In some cases material is issued by us to party and are claiming the amount(Net of Modvat and Input credit) through debit note. Request to please confirm if VAT input taken against the same is to be reversed or it is allowed

[Surender Gupta]

Please provide your own understanding and present situation on this issue for the sake of knowledge of others.

AI Summary

VAT input credit reversal queried where principal issues materials to a job worker and recovery is via debit note. Question whether VAT input credit availed by a principal must be reversed when materials are issued to a job worker and the principal recovers costs from the job worker by raising a debit note net of MODVAT and input credit.