Input Tax Credit Calculation in Uttrakhand

[PAWAN KUMAR SHARMA]

Dear Sir,

We have 2 different manufacturing companies as well as one marketing branch in Uttrakhand and all these have single VAT/TIN Number.

My question is about calculation of Input Tax Credit,

Whether we have to calculate Input Tax Credit for all these separetely and then finally have to be clubbed in Return

 

OR

We have to club all the figures first and then calculate Input Tax Credit.

Example:

 

Division 1 :(Manufuacturing): is doing 100% STock Transfer

Division 2 : (Manufacturing): is doing 50% Sale & 50 & Stock Transfer.

Division 3:Marketing: Only Sales.

 

[YAGAY and SUN]

Determination of Input Tax Credit:

(1) Input Tax Credit shall be determined under the provisions of section 6 of the Act and shall be allowed subject to the conditions

prescribed under sub-section (3), sub-section (7), sub-section (8)and sub-section (9) of the said section. (2) The dealer shall, in respect of purchase of goods other than Capital Goods, claim Input Tax Credit in the return for a tax period, and for this purpose, shall furnish the details of such goods purchased from registered dealers within the State, with the relevant return in the format of Annexure II of Form III within the time and in the manner prescribed for the purpose under Rule 11.

(3)(a) The claim for Input Tax Credit in respect of stock in hand on the date of commencement of the Act or on the date of registration as

per sub-section (5) of section 6 of the Act, shall be submitted by the dealer within 30 days of the relevant date:

1[that in respect of stock in hand on 1st October 2005, the dealer may be submit his claim for Input Tax Credit upto Provided further

2 [31st March, 2006.]]

[PAWAN KUMAR SHARMA]

This not clarify my query.

Kindly just give me a simple advice, whether a combine return have to be prepared to calculate Input Tax Credit Or individual location wise return has to be prepared and then clubbed into single Return.

[YAGAY and SUN]

A consolidated return is the answer to your query.  Kindly also check the Section 6 and relevant rules mentioned below.

[PAWAN KUMAR SHARMA]

As have already stated that we have 3 different locations

Presently, we are adding all the figures such Sales, Stock Transfer and Purchase of all the 3 difference locations and then we were calcluating the ratio between Sales : Stock Transfer, on the basis of which we were supposed to disallow @% on the stock transfer portion.

Now, one of our auditor has adviced that this ration between Sales : STock Transfer should be calculated for each division separately and then the figure of Input Tax Receiveable should be arrived.

And if we follow these 2 different types of calculations on same data there is an difference of Rs 5 lac per month i.e. 60 Lac per annum.

As the impact is too huge, request for your views.

[YAGAY and SUN]

Since there has been single TIN no. for all three unit located at three different location in the same State.  Therefore, only one return (consolidated return) will be submitted by you. Even, Uttrakhand VAT laws does not have any provisions in this regard.  Kindly also check with your consultant/Commercial Tax Officer in this regards or you can file an application to the VAT Department for seeking the clarification on disputed question on nominal fees.

AI Summary

Input Tax Credit calculation: where units share a single TIN, credit and returns should be prepared on a consolidated basis.
Where multiple units operate under a single VAT/TIN within the State, input tax credit claims and returns should be prepared on a consolidated basis; statutory provisions require claiming credit in the prescribed return format and within prescribed timeframes, including special procedures for opening stock. The State VAT law contains no provision for separate location-wise credit calculation under one registration, and taxpayers uncertain about the effect of different apportionment methods are advised to seek clarification from a commercial tax officer or file an application with the VAT Department.