Input tax credit of VAT on stock transfer can be availed after retention of 2%.... Hence even though the tax is paid @ 4% ITC can be availed only @ 2% (i.e. 4% - 2% retention).... Hope this helps.....
Input tax credit in such cases(branch transfer ,stock transfer to any other state) will available in excess of 2% of tax paid on such purchase,.
Because on inter sate purchase CST paid (which is 2%) is not eligible for ITC.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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