Important amendment to TNVAT Act regarding ITC Reversal

The Tamilnadu Government has made few important amendments in TNVAT Act with regard to reversal of Input Tax Credits in respect of Inter-state sales and Stock Transfers outside the State.

These amendments were carried out by enacting a Tamilnadu VAT (Fifth Amendment) Act, 2013 (Amendment Act) on 8th November 2013.

The effective date for these amendments is 11th November 2013.

The effect of these amendments are as follows :-

Sl. NoNature of TransactionPosition upto 11th Nov 2013Position w.e.f 11th Nov 2013
1Inter-state sales against C Form (Chargeable to tax @ 2% at present)No reversal of ITC RequiredInput Tax Credit allowed in excess of 3% of Tax
2Stock Transfers outside the state (ie) Transfer outside the state otherwise than by sales.ITC allowed in excess of 3%.ITC allowed in excess of 5% of tax.

The relevant Notifications are reproduced below :-

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