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Eligibility of claiming tn vat credit

A K Swaminathan (Practice) (55 Points)

28 March 2015

Dear Stalwarts,

I have a client who had registered under the TN VAT in April 2014, failed to file monthly returns. When pointed out the deficiency, the client calculated his VAT laibility after taking into account the ITC and prepared a cheque for that amount and also prepared monthly returns since April 14 and submitted the same with the appropriate authority (AA).

The AA on scrutinizing the returns informed that the dealer is not entitled to take ITC and has to discharge the liability before 31st of this month.

Online registration is also not done to enable filing online too.

Can anyone update me on the correctness ot the action by the dealer and the statement by the AA?

What are the remedial measures that are available to the dealer in this regard?

Thanks in advance

CA A K Swaminathan

Mumbai

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3 Replies

ANANDAKUMAR (PROPRIETOR) (66 Points)
Replied 06 April 2015

Originally posted by : A K Swaminathan

According to TNVAT Act Sec., 10

sub sec. (11) In case any registered dealer fails to claim input tax credit in respect of any transaction of taxable purchase in any month, he shall make the claim before the end of the financial year or

before ninety days from the date of purchase, whichever is later. Hence Manual returns for the period from April 14 to Dec 15 would be submitted without claiming ITC and for Balance months, you can claim ITC

Reagrds,

J.ANANDAKUMAR

Dear Stalwarts,

I have a client who had registered under the TN VAT in April 2014, failed to file monthly returns. When pointed out the deficiency, the client calculated his VAT laibility after taking into account the ITC and prepared a cheque for that amount and also prepared monthly returns since April 14 and submitted the same with the appropriate authority (AA).

taxable purchase in any month, he shall make the claim before the end of the financial year or
before ninety days from the date of purchase, whichever is later.

The AA on scrutinizing the returns informed that the dealer is not entitled to take ITC and has to discharge the liability before 31st of this month.

Online registration is also not done to enable filing online too.

Can anyone update me on the correctness ot the action by the dealer and the statement by the AA?

What are the remedial measures that are available to the dealer in this regard?

Thanks in advance

CA A K Swaminathan

Mumbai

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A K Swaminathan (Practice) (55 Points)
Replied 06 April 2015

Dear Mr. J. Anandkumar,

Thank you for the reply. Hope there is a mistake in section no. I hope instead of 19, 10 is mentioned. As the the provisions of Section 19 (11),

In case any registered dealer fails to claim input tax credit in respect of any transaction of taxable purchase in any month, he shall make the claim before the end of the financial year or before ninety days from the date of purchase, whichever is later.

This means, in April 2014, if the dealer fails to claim the input tax credit he shall make the claim before the end of the financial year or before ninety days from the date of purchase whichever is later. That means, if we assume that a purchase was made on 1st April, he should claim in April itself, failing which he has the option to claim before 30th June being 90 days or before the end of the financial year i.e. 31st March of next year whichever is later. In the case referred by me, the dealer has claimed the credit before the end of financial year. What is wrong in that? Can you explain now?

Thanks and Regards

CA A K Swaminathan