Stock transfer

what is the effect on Gross turnover of the Company as well as on the state turnover

please answer as soon as possible

Thank u

Dear Deepak,

As far as Karnataka as concerned, Input VAT equal to 2% in proportion of stock transfers as compared to total transactions (stock transfer+taxable sales) needs to foregone. 

Suppose Input tax (at 4%) is Rs.100 and dealer has effected stock transfer of 2000 and taxable sales of Rs.2000, the ineligible input tax will be as below;

2% of 100 will be Rs.50.  Out of this, a sum equal to % of stock transfers to total transactions needs to be foregone (Rs.50/4000 (total transactions) * 2000 (stock transfers)) = Rs.25 (Ineligible input tax for total input tax of Rs.100).

Hope the above clarifies your doubt.

Regards/Dharmaraju