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VAT on stock transfer/self consumed goods

Ankit Goyal (Banker) (78 Points)

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?

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19 Replies

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 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.

Adv. S Sharma (Lawyer) (574 Points)
Replied 09 January 2008

hi well, trasfer by F form these r applicable on stock trasfer of inter state sale not intra state sale

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 09 January 2008

No 'F Form' required if the transfer is intra state stock transfer.

Ca Ramakrishna Sangu (employment) (39 Points)
Replied 10 January 2008

hi when goods were transfered on STA basis they should be sent along with way bill evidencing that these goods are sent on STA basis and not as sales after wards FORM F is to be obtained from the receiving branch. this provison is contained in cst act

(Guest)

Since the stock transfer is Intrastate transfer of goods and no VAT or form F will be required.

bakul007 (15 Points)
Replied 15 September 2008

dear all

please inform whether stocks send by stock transfer can be sold by vat invoice and it also will consumed by self

kindly inform

regards

bakul yagnik

bakul007 (15 Points)
Replied 15 September 2008

kindly inform whether self consumed good will attaract any vat provisions

regards

bakul yagnik

(Guest)

Dear Sirs,

We have taken up a labour contract in other state.

While executing the labour work, some consumables are used on which we pay Vat @ 12.5%. I would like to know whether we can take the VAT credit.

(Guest)

Dear Sirs,

My question is regarding interstate works contract.

1. We have a business activity in karnataka and we are likely to get a works contract in Maharashtra.

2.whether we should open a branch office in Maharashtra and get the VAT registration done there and procure the materials from their only to execute the work

or whether the billing can be done from karnataka?

kindly guide me in this matter. Please explain me all the aspects clearly.

(Guest)

Can vat charged in case of Stk Trf from UP State (on Sunflower Seed) to Mah State?

Also can take entry in Mah for Stk trf Inward with Vat?

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 30 September 2008

VAT is leviable only on sale or purchase of goods. Stock transfer is neither a sale nor a purchase. However in case of predecided ultimate buyer the stock trfr may be traeted as sales.

(Guest)

i am selling materials to my client in punjab ( from Bombay) which he used in contact job ( main contractor )by charging 2 % CST. my client was compelled to take registration in punjab. as they ( main contractor has to pay 12.5 % consumtion tax ? can you clarify the matter.

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 10 October 2008

No clarification required. You are charging CST on sales made to Punjab based customer and he is lible for local VAT on his subsequent sales.

Regarding tax planning, it is advisable for your cutomer to contact a good consultant at Punjab.

manas (manager accounts) (20 Points)
Replied 15 October 2008

My client has 3 existing plants and now it wants to establish one new plant. For this it needs to purchase plant & machinery from other State. Could you please let me know, is there any procedure do exists under which we can take the CST benefit, even though our new factory has not been registered under CST Act.

For your information, as there is no commencement of production, we cann't apply for CST regn.