Rate of reversal of Input Tax Credit u/s 13 of Punjab VAT Act, 2005 has been increased from 4% to 5% w.e.f 04/12/2012. Section 13 of Punjab VAT Act provides reversal of ITC @ 4% in the following circumstances:
1. Reversal of ITC of tax paid on purchase of goods within State, if such goods are sent outside State other than by way of sale in the cource of inter-state trade or commerce or in the cource of export out of territory of India.
2. Revesal of ITC of tax paid on purchase of goods within State, if such goods are used in manufacturing or in packing of taxable goods sent outside the State other than by way of sale in the cource of inter-state trade or commerce or in the cource of export out of territory of India.
3. Reversal of ITC when goods are sent for Job work.
4. Reversal of ITC on furnace oil, transformer oil, mineral turpentine oil, water methanol mixture, naphta and lubricants except when used in production of taxable goods or capitive generation of power.
Now in all the above cases reversal of ITC will be by 5% instead of 4%.
The notification is as follows
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1. Reversal of ITC of tax paid on purchase of goods within State, if such goods are sent outside State other than by way of sale in the cource of inter-state trade or commerce or in the cource of export out of territory of India.
2. Revesal of ITC of tax paid on purchase of goods within State, if such goods are used in manufacturing or in packing of taxable goods sent outside the State other than by way of sale in the cource of inter-state trade or commerce or in the cource of export out of territory of India.
3. Reversal of ITC when goods are sent for Job work.
4. Reversal of ITC on furnace oil, transformer oil, mineral turpentine oil, water methanol mixture, naphta and lubricants except when used in production of taxable goods or capitive generation of power.
Now in all the above cases reversal of ITC will be by 5% instead of 4%.
The notification is as follows
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