28 January 2012
I work in spinning mill, gobi. We purchase fibre by CST purchase and we sell vatable local sale, CST interstate Sale and also consignment sale. We claim ITC for other manufactuing inputs like machinery spares.
Till now I haven't reversed any ITC. Now the assessing authority says that I have to reverse ITC 4% proportionate for both CST and consignment sales, even though I produce C and F forms for those sales.
Some say, we need not if we produce the forms. Some say even if we produce Form F for consignment sales we have to reverse ITC for 1%.
Please clarify me which is right? How should I reverse ITC in vat returns? Should I have to give bill wise details in annexures?
Input tax credit needs to be reversed to the tune of input tax credit claimed on the goods which are sold on consignment basis against F form. However incase of local purchases and CST sales there shall be no Input tax credit reversal.
Please note that my answer is w r t Karnataka VAT. Sec 11 , sec 17.
CAclubindia
