Availing itc for interstate sales to end user without c form

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abhishek devaraj (Querist)
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13 April 2014 Hi all, We are a TamilNadu based consumer durables dealer currently selling products online through various ecommerce platforms like Snapdeal etc. We billl and ship to end users in other states as per orders provided by the ecommerce websites (c form not given). We purchase locally (within Tamilnadu) and having been effecting the sales at the current VAT here at 14.5% output. We are also availing input tax credit at 14.5% for the corresponding purchases. Are we right in doing so as we heard that ITC cannot be availed for interstate sales without C form as per a recent government order.We bill to the end customer and payments are made by a sister concern of Snapdeal to our account. Kindly provide your valuable inputs with regards to TNVAT and suggest alternatives as I know of a huge number of dealers currently facing the same issue without proper guidance. Any help would be much appreciated.

Read more at: https://www.caclubindia.com/forum/request-clarification-on-availing-itc-interstate-sales-tnvat-288488.asp#.U0mj9dJkPHo

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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13 April 2014 Mr A Devaraj,
There are some common rules and laws regarding interstate sales and availment of ITC,particularly when you are selling without 'C' form and charging full rate of CST. You can avail ITC of vat paid on local purchases while paying CST on the interstate sales made by you. This is common for all states. However,I will check up with any recent changes made in TNVAT rules and let you know. At present,what you are doing is correct......mjk

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abhishek devaraj

abhishek devaraj (Querist)
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14 April 2014 Thank you for your guidance. I was told of a GO passed on 7.11.2013 regarding the same issue. Kindly take a look at TNVAT and provide your perspective.

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MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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14 April 2014 Mr A Devaraj,
I have seen the TN VAT Act and some amendments made on 8-11-2013. As per sub sec5(c) of Sec19,if you make any interstate sales without 'C' form(i.e.Sec 8(2) of CST Act)you are not eligible for input credit of local purchases from RDs.Whereas this is not the ruel in Karnataka and other states.So,you may avail the ITC only while selling to RDs in other states against 'C' form only......mjk

abhishek devaraj

abhishek devaraj (Querist)
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15 April 2014 Thank you sir, for the clarification. Saved us from a lot of trouble. I know of dealers here who have sold interstate worth crores of rupees and now they have to reverse itc. I think only TN Vat has this rule and other states or union territories like Pondycherry don't? Am I right? since we are thinking of setting up a branch in Karnataka or Pondicherry for future business.

Thank you once again sir.

abhishek devaraj

abhishek devaraj (Querist)
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18 April 2014 Looking for your guidance on Pondycherry vat rules regarding the above issue. Dowe need a new TIN or is our existing one enough to setup a branch there?