08-06-2011, 04:54 PM
Please elaborate the addition of value added tax @ 2% is under which section or SRO?
Generally speaking, according to s.8B of the sales tax Act, 1990, "a registered person shall not be allowed to adjust input tax in excess of ninety percent of the output tax for that tax period"
For example if out put tax is Rs.100, a registered person cannot claim input tax exceeding Rs.90.
Exception to the above rule is given in sub section 2 of s.8B
However, the input tax not so adjusted would be carried forward to next tax period as provided in Proviso to sub-section 1 of S.10. Later refund may also be claimed subject to such restrictions as notified by Board.
