Itc adjustment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2013 In the year 2010-11 and 11-12 i have not adjusted cst with ITC (at the time was suffcient ITC availbale) how how i can adjust cst pending amount with ITC please advice.
Thanks and regards

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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22 September 2013 CST paid on purchases can not be claimed as input credit .....mjk

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2013 In the year 2010-11 My ITC us Rs 250000.00
My CST 2% Sales Rs 10 Lakhs tax is Rs 20000.00
but i have not adjusted in online .
Now how can i adjust please advice.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 To adjust CST (Central Sales Tax) with ITC (Input Tax Credit) for the years 2010-11 and 2011-12, follow these steps:

### 1. **Understanding the Scenario**

- **ITC (Input Tax Credit)**: ITC on purchases can be claimed to offset the tax liability on sales.
- **CST (Central Sales Tax)**: CST is levied on inter-state sales. Unlike VAT, CST does not have a mechanism for direct credit adjustment against ITC. Instead, CST is payable separately.

### 2. **Steps to Adjust CST with ITC**

#### **For FY 2010-11 and FY 2011-12**

1. **Determine ITC Available**: Verify the ITC available in your records for the years in question.

2. **Check CST Liability**: Confirm the CST liability for the relevant periods. From your details:
- Sales of Rs. 10,00,000 (CST @ 2%) = Rs. 20,000.

3. **Adjustment Mechanism**:
- **CST does not directly adjust with ITC under VAT/CST regime**: You cannot directly adjust CST with ITC because CST and VAT/ITC are separate taxes. Instead, you need to ensure that CST is paid on time and filed correctly.

4. **Rectification**:
- **File Revised Returns (if applicable)**: If you missed adjusting the CST or did not include it properly in your returns, check if revised returns can be filed for the concerned periods.
- **Check State-Specific Rules**: Some states might have specific provisions or mechanisms for such adjustments, but generally, CST adjustments need to be handled as per the specific CST return requirements.

5. **Documentation and Compliance**:
- **Maintain Documentation**: Ensure all purchase invoices and CST-related documentation are accurately maintained.
- **Consult a Tax Professional**: Due to the complexities involved, especially considering the changes from CST to GST, consult a tax advisor or professional who can guide you based on your specific situation and jurisdiction.

### **Key Points to Note**

- **Legal Framework**: Ensure that any adjustments or revisions adhere to the legal and regulatory framework of the respective years.
- **Transition to GST**: If you're operating under GST now, the CST regime is replaced by GST. Ensure compliance with GST laws for current and future transactions.

### **Summary**

You cannot directly adjust CST with ITC since CST and ITC are treated differently. Instead, ensure that CST is properly reported and paid as per the regulations for the years 2010-11 and 2011-12. For adjustments and corrections, consulting with a tax professional and verifying the possibility of filing revised returns or other corrective actions would be prudent.

If you have further questions or specific cases, always consult with a tax advisor to ensure compliance with current regulations and accurate financial management.