VAT on stock transfer/self consumption

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Ankit Goyal (Querist)

08 January 2008 The following situation is covered under Punjab VAT act

One of our clients has two branches one at Jallandhar and second at Ludhiana in Punjab.When goods are transferred from Jallandhar branch to Ludhiana branch the VAT invoice is made in respect of same and goods are received at cum VAT price by Ludhiana branch.

It must be noted that both the branches are of a same company.

My question is wether this transaction to self can be regarded as sale(as VAT is only chargeable on sales)? And wether VAT is leviable on sale to self?

What are the supporting section or rules in Punjab VAT act for selfconsumption or branch transfer?

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

09 January 2008 No Invoice should be issued in case of stock transfer. Whether it is inter-state or Intra-State stock transfer of goods. Invoices should be issued only, if there is any sale.
Section 6A of the CST Act may kindly be perused for provisions relating to inter state stock transfer.
It is a golden rule that no body can sell something to himself.
Though I have not gone through Punjab VAT Act, I guess that section relating to availability of ITC should contain such provisions.

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