Vat on stock transfers

VAT (Legacy) 343 views 1 replies
Whether vat is levied on stock transfer from one branch(branch-a) to another branch(branch-b) within the state?Whereas this material is final product in branch -a and it is raw material in branch-b
Replies (1)

Absolutely not...transfer of goods from one branch to another, whether "within the state" or "outside the state" is not liable to VAT or CST as they do not involve "sale". Only thing is that entire ITC is allowed in case of intra-state stock transfer whereas only partical ITC (i.e., after rentention of 2% of ITC by State Governments) is allowed in case of inter-state stock transfer. As far as nature of product is concerned, I think it depends whether you are transferring the 'finished good after some processing" OR "raw material or finished good as it is". In the former case, it will be stock transfer of 'finished good' & in the later case it will stock transfer of 'raw material' or 'finished good', as the case may be. However, it always will be raw material for branch B...

Hope ur doubt is cleared now...


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