Vat Refund

This query is : Open

Sunil Kumar Nagpal (Querist)
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16 December 2010 Please clarify that how the VAT credit can be claimed if the goods are transferred as " Stock / Branch Transfer" as inter state (i.e. branch located at other state)and the VAT amount is paid on the Raw Material which is also purchased from other states.

Amit Bajaj

Amit Bajaj (Expert)
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17 December 2010 Under the Punjab VAT Act if taxable goods are purchased from within Punjab and are sent as branch transfer outside the state i.e otherwise than as sales then the input tax credit to the dealer branch in Punjab will be allowed only to the extent by which the amount of tax paid in the State exceeds four percent on purchase of goods that is to say if tax paid on raw material is 12.5% then ITC will be available only @ 8.5% in view of section 13(2) of PVAT Act since the raw material purchased is disposed of as branch transfer outside the state i.e otherwise than as sales.

If the goods are purchased from outside Punjab and sent as branch transfer outside the state then there is no question of input tax credit since no credit of CST is available in any case.

Sunil Kumar Nagpal

Sunil Kumar Nagpal (Querist)
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17 December 2010 Please also clarify that what will be the situation when the goods are produced / Manufactured and the whole Ram Material is purchased from outside punjab

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