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Is input tax credit available on goods stock transferred? If ineligible, will the input tax credit relating to such goods lapse?

April 26, 2017ineligible input lapse relating stock tax credit transferred

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Is input tax credit available on goods stock transferred? If ineligible, will the input tax credit relating to such goods lapse?

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VAT Act provides for no input tax credit on goods despatched on stock transfer. However, if the goods have been purchased locally on payment of tax and subsequently stock transferred after taking input tax credit, the input tax credit shall have to be reversed to the extent of 4 per cent.