Dear Members.....
I have a Query regarding Reversal of ITC on Transfer of Stock to other state and Sale made from other state.
A Comapny in Punjab purchses raw materail and manufactures a finished product.It claims ITC on the vat paid on Purchases.. Ot of the Total production ...A certain part of the goods has been transferred to co.'s Branch in Delhi to be sold in Delhi as Stock transfer and it credits its' ITC by amount equilent to "CST @ 2%" or say Pay it .. which in nutshell .. means the same thing.. .... Now the point arises....
Do the co. need to Reverse the ITC claimed on the purchases made in punjab on contention that since the sale is not gonna happen in Punjab,hence No revenue gonna occur to the states so NO INPUT shall be admissible.
OR
Company can avail ITC on purchases so made in punjab. (Although the output vat will be generated in Delhi )
I'm personally of the opinion that ITC should be available to the Co. after deducting the CST @ 2% on such stockk transfer.
Plz Clarify. A quote of the Relevant Rule /Provision shall be highly appreciable.
Regards
CA Manish Arya
CAclubindia
