Restricted Input tax credit on inter-state stock transfers whether constitutional?

0 comments Sunday, July 1, 2012

Most of the States have legislated provision in their respective VAT Acts for allowing a restricted input tax credit on the goods purchased within State if such goods are transferred outside the State otherwise than as sale. Ussualy Input tax credit in such cases is allowed only in excess of 4% or 2%.


Under Punjab VAT Act, 2005 section 13(2) deals with such situation and allows input tax credit to the extent by which the amount of tax paid in the State exceeds 4% on the purchase of goods, If such goods are:
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