Studyhatch Forum -VAT & CST

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What is the time limit to take input credit and what are the circumstances where input credit has to be reversed?
Solution

i) The Input Tax Credit on purchases can be claimed during the month of receipt of goods, if supported by original tax invoice containing prescribed particulars. If input tax credit omitted to be claimed during the month of purchase it can be claimed within 90 days from the date of purchase or before the end of the financial year, whichever is later. ii) Certain situations in respect of which input tax reversals to be made are ? sale of exempted goods, sales without C/F Forms, etc. Certain other prescribed situations are: a)Input tax credit was availed but subsequently the related goods have been stolen or damaged or destroyed. b)Input tax credit was claimed but subsequently it has been detected that related purchases are from bogus traders (bill traders). c)Input tax credit was availed but related goods have been given as free sample or gift to others. d)Input tax credit availed but subsequently the related goods are used to provide facility to the proprietor/partner/director of the concern.

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