Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: VAT RATES :: due date for vat payment :: VAT Audit :: cpt :: ACCOUNTING STANDARD :: form 3cd :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS
 
 
« VAT (Value Added Tax) »
  Filing of reconciliation return in form 9 for the year 2016-17
 Govt may send notice to 162 companies; ask for VAT returns
 Cenvat Credit Is Not Income Liable To Be Taxed
 Cos wanting to claim VAT refund on employees' foreign stay can get professional help
 Regarding disposal of pending form DVAT 04 & 07 Form Applications
 Disposal of pending Form DVAT 04 & Form DVAT 07 applications: regarding
 Cenvat Credit Rules, 2017 III Part
 VAT phased out in TS
 Cenvat Credit Rules, 2017 II Part
 Cenvat Credit Rules, 2017 – Part I
 How much do you know about VAT as a taxpayer?

No reversal of ITC on closing stock of iron and steel goods is warranted under rule 21(8) of Punjab VAT Rules
September, 04th 2014
Recently while filing the fourth quarter return of year 2013-14, the Excise and Taxation Department, Punjab asked for the closing stock of Iron and steel goods lying in stock of dealers as on 29.01.2014 for the purpose of making reversal on such stock at the rate of 2.20% of the available Input tax credit on such closing stock. The reason for such action was the newly added rule 21(8) in Punjab VAT Rules, 2005, which was introduced w.e.f. 01.02.2014.
 
This rule 21(8) runs as under:
 
“Where some goods as input or output are lying in the stock of a taxable person and where rate of tax on such goods is reduced from a particular date, then from that date, input tax credit shall be admissible to the taxable person on the sale of goods lying in stock or on using the goods as input for manufacturing taxable goods, at the reduced rate.”
 
As the rate of tax on iron and steel goods was reduced from 4.95% to 2.75%, therefore the Department asked for the reversal of available ITC on such stock.
 
It is to be noted that the rate of tax on iron and steel goods was reduced with immediate effect as per the notification dated 25.01.2014 bearing No. S.O. 9/P.A 8/2005/S.8/2014, which was published in the official gazette on 29.01.2014, meaning thereby the rate of tax on iron and steel goods was reduced w.e.f. 29.01.2014.
 
I also had written an article earlier stating that reversal on stock of iron and steel goods is to be made only if the input tax credit is available at all and if no input tax credit is available on the date of reduction of rate of tax, then no reversal is required to be made.
 
However, I have come across a very astonishing discrepency whereby a big question has arisen i.e whether any reversal under rule 21(8) of input tax credit on account of reduction of rate of tax on iron and steel goods is warranted at all?
 
The reason for it is that Rule 21(8) of the Punjab VAT Rules, as stated above has been introduced prospectively w.e.f 01.02.2014, which means that reversal under rule 21(8) will be made in case of only those goods on which rate of tax has been reduced on or after 01.02.2014.
 
In case of iron and steel goods the rate of tax was reduced w.e.f 29.01.2014 as per the notification stated above. Once it is clear that the rate of tax on iron and steel goods was reduced before the introduction of rule 21(8), therefore rule 21(8) cannot have any bearing on the reduced rate of tax on iron and steel goods, as the sub-rule 8 of rule 21 was introduced prospectively w.e.f. 01.02.2014 and not retrospectively.
 
Hence the conclusion should be that no reversal of input tax credit on iron and steel goods is warranted at all under rule 21(8) of Punjab VAT Rules, 2005, which the Department has sought by asking the dealers to declare their closing stock of iron and steel goods on the date of reduction of rate of tax.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions