TaxTMI 
TaxTMI 
TNVAT ITC reversal for CST 2% sales
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....NVAT ITC reversal for CST 2% sales<br> Query (Issue) Started By: - venkat eswaran Dated:- 14-12-2013 Last Reply Date:- 24-6-2014 VAT + CST<br>Got 21 Replies<br>VAT / Sales Tax<br>Dear Sirs, Tamil Nadu govt TNVAT issues amendment in ITC reversal for 2 percent CST sales against C form as follows: Till date Inter state sales against C form [2 percent at present] no reversal of ITC required from 11.11.13 inter state sales against C form - Input tax credit allowed in excess of 3 percent of Tax. Kindly clarify what is that ITC ALLOWED IN EXCESS OF 3 percent OF TAX. Whether we have to reverse any ITC for 2 percent inter state sales and how much to be reversed. Pl give your valuable reply Venkat Reply By Ravikumar muthusamy: The Reply: ye....
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....s you have to reverse 3 percent ITC if you made CST 2 percent sales against c form if you availed ITC on vat purchased goods else if the goods sold at the rate of CST 2 percent were imported or CST purchased or stock transfer inward then there is no need to reverse. Ravikumar chennai 9094043313 www.saitaxsolutions.com Reply By LAKSHMI NARAYANAN TR: The Reply: The identification of amount of 3 percent ITC reversal for Traders will stay. But lot of representation have gone from manufacturers to exclude this clause for them. We need to wait till any clarification / amendment comes to this effect. It will become very cumbersome activity for manufacturers and more complex if the items procured prior to current year and sold in the current ye....
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....ar - tracking of ITC amount and explaining to VAT department will all invite litigations. I think similar provisions exist in Gujarat VAT. Experts of Gujarat VAT can throw light on this. Regards TR Lakshmi Narayanan Reply By Nagarajan Kannan: The Reply: The business community has represented to the TN Govt not to pursue with this amendment as the date from which the amendment has to take place is yet to be notified. Apart from this amendment, TN Govt has also amended the ITC rules w.r.to branch transfer. If the amendment comes into force, then ITC will be allowed in excess of 5 percent of tax in respect of branch transfer as against 3 percent of tax at present. Regards Kannan Reply By venkat eswaran: The Reply: Dear Sir, Thanks ....
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....for ur reply. This CST sales 2 percent ITC reversal is applicable to Nov13 return is it? Pl provide the ITC reversal amount for the following exmaple. Total ITC taken Rs. 5000/- Total interstate CST 2 percent sales [against C form] is Rs.75000/- & Total sales is Rs.100000/- How much ITC reversal i have to done. pl give calculation with the above example. Thanks, Venkat Reply By V MALATHI: The Reply: To Calculate this Rs.5000/100000*75000 and then 3/5 it will be captured as Rs.2,250/- it will be reversed or to pay the amount by Cheque. This is Ok. But in future we are having Audit if they can ask any segregate records it will be totally confused. It we want to purchase under CST 2 percent what is the procedure itself? Reply By Bala....
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....ji Shanmugam: The Reply: hello malathi mam, thanks for the formula, i calculated Rs. 5000/100000*75000 answer shown Rs.3750/- after that we have divide by 3? For cst 2 percent sales Reply By Balaji Shanmugam: The Reply: hello to all, thanks for the formula, pls clarify my doubt i calculated Rs. 5000/100000*75000 answer shown Rs. 3750/- after that we have divide by 3? For cst 2 percent sales Reply By Nagarajan Kannan: The Reply: Dear All Assuming the ITC of Rs 5000 is against 5 percent VAT purchase, then out of this 3 percent is Rs 3000. (5000*(3/5). Simply we have to first calculate 3 percent out of the ITC. If the VAT rate is 14.5 percent , then the formula for calculating 3 percent is ITC*(3/14.5) If CST sale is Rs 75000 ou....
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....t of the total sales amount of Rs 100000, then the reversal formula is (ITC 3 percent ) X (Interstate Sales/Total Sales). In this case it is = 3000*(75000/100000) which is Rs 2250. Hence Rs 2250 is to be reversed in the ST Return. Hope the issue is clarified. Regards N.Kannan Reply By AJESH KUMAR MADIKAI: The Reply: DEAR SIR I have a doubt , as per your calculation my CST sales for the month is 75000/- against this, I have to pay CST 2 percent tax Rs.1500/-. So my doubt is apart from this CST Tax Rs.1500/- I have to pay again this CST Reverse credit amount Rs. 2,250/- to the department? Please give your reply. Reply By Nagarajan Kannan: The Reply: The amount of Rs 2250/- has to be adjusted with the ITC available and the balanc....
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....e amount of VAT needs to be paid. If there is no VAT liability then the balance ITC has to be carried forward after reversing the credit for CST sales. Regards N.Kannan Reply By ganesh kumar: The Reply: What is the section/rule to be quoted on the Annexture-III for the above reversal type. Reply By Nagarajan Kannan: The Reply: Section 19(2)(v) of TN VAT Act 2006. Regards N.Kannan Reply By Shanmugam Sreedevi: The Reply: Sir we are also purchasing materials from interstate with CST2 percent . We are doing sales local ie tnvat 5 percent , cst 2 percent & cst 5 percent . We have paid Vat 5 percent after adjusting ITC Claimed. We have also to reverse 3 percent of ITC, even if we purchased materials from other state also and after a....
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....djusting ITC VAT paid. Please clarify Reply By LAKSHMI NARAYANAN TR: The Reply: Ms Sreedevi, Question of availing input credit will not arise for inter state purchases. Accordingly Sec 19(2)(v) - reversal of ITC on inter state purchase cannot arise. Input reversal is only on ITC Availed from TNVAT purchase materials and used for / soldas Inter state Sales - Hope this would clarify your query. Reply By Nagarajan Kannan: The Reply: In my view, If you are able to keep separate stock registers for Interstate purchases and local purchases and can correlate each of the sale invoices to the respective purchases, then only the Interstate sale our of Interstate purchase will be exempt from ITC reversal. Else the general formula will appl....
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....y. Please check with your CTO/AC on this because the VAT Rule did not explain as to how this has to be done. Regards N.Kannan Reply By venkat eswaran: The Reply: DEAR ALL, We heard that Dealers in TN have filed writ petition in Madras high court against TNVAT ITC reversal. The judgement delivered there is NO ITC Reversal for MUNUFATURERS applicable. Is it correct? kindly clarify. IF it is true how we have to recover the ITC reversal amount paid for 3 months Nov, Dec & Jan14 Kindly share your views Thanks G Venkateswaran Reply By Vasan Priya: The Reply: I would also like to have clarity on the situation whether a company have two percent of ITC viz., 5 percent and 14.5 percent , what is percent of "Rate of ITC" to be co....
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....nsidered. On my view we can take the Weighted avg. Also was noted that Chennai High Court given clearance for not reversing the ITC for Manufacturers. Need your views pl. Reply By vasanthi siva: The Reply: Dear Sir, We are doing 5 types of sales . 1. labour sales (mtrl will be supplied by party) 2. Exempted sates (Agaisnt CT 3) 3. Exports sales (Direct export) 4.cst sales (2 percent sales) 5. local vat sales. ( 5 percent sales) how can we calculate the reversal of credit. please clarify vasanthi(9940660292) Reply By yash arya: The Reply: It was brought out in these columns that TVS Group has got the Stay orders by HC,Chennai. Can you share with me the details of Stay Order so that other Dealers can follow suit. -Shekar R Re....
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....ply By Aswini Raja Subramanian: The Reply: Dear All, I want to know the consequences for default in showing Reverse Credit in VAT Return. Reply By Nagarajan Kannan: The Reply: In addition to the reversed tax, you may have to pay penalty, if levied u/s 27(3)/27(4) of the TN VAT Act 2006. NK<br> Discussion Forum - Knowledge Sharing ....