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Applicability of vat input credit in case of branch transfer

harikrishna (Article) (26 Points)

11 June 2008

hai friends,

my question is that,

HO which is in state A, transferred some goods to branch which is in state B.

1.HO purchased all goods in state A and paid the VAT.

2.HO transferred some goods to branch which is in state B

3.Branch sold goods in the state B and Paid VAT.

Is it branch can Avail vat input credit whatever paid by HO on its purchases in state A.

pls reply soon,

Regards,

harikrishna

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10 Replies

(Guest)

VAT credit cannot be availed by branch office, wheras head office can avail VAT input credit subject to rule 131of KVAT act which states the formula for calculating ineligible input credit : ((Sale of exempt goods+Non taxable transactions)*Total input credit)/ Total turnover. Total input credit to be restricted to rate of CST.

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amrut (c.a.student) (23 Points)
Replied 17 June 2008

No,branch cann't avail the input tax credit on the goods purchased in the state A.However ,HO is also restricted to claim input tax credit to extent of goods sold in the state A by way of reduction in input tax credit corrosponding to the sale/transfer made to branch located in state B.(as per the rule 53(3) of Maharastra Value Added Tax Rules'2005)

subramanya (Professional) (907 Points)
Replied 18 June 2008

Dear Harikrishna,

The treatment of goods differ from state to state.

Let us know the state names also,

harikrishna (Article) (26 Points)
Replied 18 June 2008

ho is in tamilnadu and branch is in andhra pradesh

ca rahul (professional) (58 Points)
Replied 19 June 2008

Branch B can not claim VAT Credit & Purchase is made in HO & HO can claim Vat credit up to the eligible limit ( Which is calculated according to formula, e.g. in AP VAT more than 4% can be claimed fully & up to 4% to be calculated in ratio of taxable sale & exempt sale/Transaction)

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utsav (student) (58 Points)
Replied 27 June 2008

SUPPOSE I M A COMPANY THEN CAN I TAKE VAT INPUTCREDIT ON MATERIAL USED FOR INTERIOR WORK OF MY SCHOOL.

manish ginoria (employee) (30 Points)
Replied 27 August 2008

CA Ravish Trivedi (The Possibilities are Infinite...) (772 Points)
Replied 05 September 2008

Branch cannot avail input tax credit . Even HO should reverese the amout of Input Tax for the value of goods transfered to another state.

M P Singh (Service - Finance & Taxation) (180 Points)
Replied 08 September 2008

Originally posted by :Raveesh

Hi ,

Branch can't calim the VAT benefit in case of Goods t/f from HO . Even HO has to reverse the VAT input claimed on purchsae of goods t/f to the branch equal to the rate of CST .

Regards,

M P Singh

(Guest)

Originally posted by :harikrishna
"	hai friends, my question is that, HO which is in state A, transferred some goods to branch which is in state B. 1.HO purchased all goods in state A and paid the VAT. 2.HO transferred some goods to branch which is in state B 3.Branch sold goods in the state B and Paid VAT. Is it branch can Avail vat input credit whatever paid by HO on its purchases in state A. pls reply soon, Regards, harikrishna	"