TN VAT INPUT TAX REVERSAL AND CST SALE AGAINST C FORM

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  1. SAJID AHMED

    SAJID AHMED New Member

    Dear Experts,

    Please give a full information about :

    CST Sale against C form in TN VAT.

    What is the reversal of Input Tax Credit?

    And why it should be done?

    And what is the use of C form in TN VAT.
     
  2. Form 'C' is issued by the purchaser to the seller if the sale is between two states. The applicable tax for inter-state sales, if Form 'C' is issued, is 2%.

    Reversal of Input tax credit - you have to reverse the tax credit taken if you have taken the input not according to the rules. There are many rules for reversal of input tax credit.
     
  3. SAJID AHMED

    SAJID AHMED New Member

    You are right CST sale is 2% if sold with C form. And balance 3% ITC will be in your account. Here, In TN VAT if you buy locally by paying VAT 5% . And the same you sell it to other states against C form for 2%. Then you have to reverse 3% of ITC. Do you think it is right.
     
  4. Yes, it is right. This is in order to prevent the tax revenue loss to the Government.
     
  5. SAJID AHMED

    SAJID AHMED New Member

    I agree, there is the revenue loss to the Govt. But what is usage of C form here.
    The Govt., must say that , you sell the goods within the state or outside the state, you may adopt the prevailing VAT rate in the state. It looks simple and transparent. May I right?
     
  6. You're right. It is complicated. Receiving forms from the clients is really headache. This should be abolished. Let them charge the flat rate either @ 2% or at the prevailing in each state.
     
  7. SAJID AHMED

    SAJID AHMED New Member

    thanks.
     
    Udaya Chandran likes this.
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