AMIT BAJAJ ADVOCATE

The Excise and Taxation Department, Government of Punjab has amended rule 21 of Punjab VAT rules to add sub rule 2-A in the said rule to provide for that ITC shall be allowed to a taxable person to the extent of tax payable on the resale value of goods or sale value of manufactured/processed goods where such goods are sold below the purchase price in case of resale or cost price in case of manufactured/processed goods. The balance ITC shall be reversed.

Implications of the ammendment: The implications that follow from this amendment are that now if a person sells goods below the purchase price in case of traded goods and below the cost price in case of manufactured goods then the resultant excess ITC that will arise due to loss that arises will have to be reversed. In other words ITC will be available only upto the sale or resale value of the goods in question.