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Ankit (Querist)
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23 August 2010 Branch A :-- Puchase material @12.5% and same transfer to Branch "B"
Branch B :-- further processing the same selling it @ 12.5%

Question :
1) what entry i'll pass in branch "A" for transfer of stock without showing credit effect in purchase.as m claiming input credit in branch "A" on total purchase.
2) what entry i'll pass in branch "B" as no input credit m taking in branch "B" and material received from branch "A"

Note :-- Branch "A" is contractor
Branch "B" is manufacturer

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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24 August 2010 If the branches are under same company and same state

Entry for Purchase by A

Dr:Purchase a/c
Dr: Input VAT A/c
Cr: Supplier

Through stock transfer

Dr:Branch B a/c
Cr: Stock A/c

In Branch B

Dr:Stock received a/c
Cr:Branch A a/c

for Sale

Dr: Customer a/c
Cr: Sales a/c
Cr: out put vat a/c

While consolidating the branch a/c`s the input and output will be set off

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