Stock transfer of finish goods to haridwar
This query is : Resolved
06 December 2011
Hello Experts,
Pl. guide us the procedure needs to be follow in case of stock transfer of our finish goods to our sister concern haridwar which is under area based exemption unit.
Pl. guide us the procedure needs to be follow in case of stock transfer of our finish goods to our sister concern haridwar which is under area based exemption unit.
08 December 2011
F form required for stock transfer-
F form is required to be produced as proof of stock transfer. As per section 6A(1) of CST Act submission of F form is mandatory to prove stock transfer. Otherwise, the transaction will be treated as sale for all purposes of CST Act.
F Form is issued by the branch office/consignment agent receiving goods as branch/stock transfer to its head office/principal who is sending the goods by way of stock/ branch transfer. The H.O./Principal produces such F forms to its assessing authority to prove such stock/branch transfer.
One F Form for one month: First Proviso to Rule 5 of CST Rules 1957 provides that one F form covering receipts during the month can be issued. If space in F form is not adequate, a separate list may be attached as annexure to form F giving details, provided that the annexure is firmly attached to the form. The blank form has to be obtained from sales tax authority in which the transferee is situated, i.e. State where goods were received. If the form is lost, indemnity bond has to be given and duplicate form clearly marked as Duplicate can be issued.
So your unit can transfer stock to haridwar branch against form F.
In case haridwar branch transfers stock to your unit then the input tax credit available by haridwar unit will be lost.
CA. Richi Saxena
RICHI_SENSEX@YAHOO.COM.AU
HARIDWAR, UTTARAKHAND.
F form is required to be produced as proof of stock transfer. As per section 6A(1) of CST Act submission of F form is mandatory to prove stock transfer. Otherwise, the transaction will be treated as sale for all purposes of CST Act.
F Form is issued by the branch office/consignment agent receiving goods as branch/stock transfer to its head office/principal who is sending the goods by way of stock/ branch transfer. The H.O./Principal produces such F forms to its assessing authority to prove such stock/branch transfer.
One F Form for one month: First Proviso to Rule 5 of CST Rules 1957 provides that one F form covering receipts during the month can be issued. If space in F form is not adequate, a separate list may be attached as annexure to form F giving details, provided that the annexure is firmly attached to the form. The blank form has to be obtained from sales tax authority in which the transferee is situated, i.e. State where goods were received. If the form is lost, indemnity bond has to be given and duplicate form clearly marked as Duplicate can be issued.
So your unit can transfer stock to haridwar branch against form F.
In case haridwar branch transfers stock to your unit then the input tax credit available by haridwar unit will be lost.
CA. Richi Saxena
RICHI_SENSEX@YAHOO.COM.AU
HARIDWAR, UTTARAKHAND.
08 December 2011
what is the benefit on stock transfer & if we sale this what is the impact ??
08 December 2011
Stock is usually transferred when the market of the area in which the stock is to be transferred is thought of being explored for selling goods. This is done when the area has sales potential for the company.Normally companies place their manufacturing units where they get exemptions on excise duty etc on manufacture and then they transfer their manufactured goods to other cities where the manufactured goods have the highest potential of being sold.
Impact of selling stock transferred goods is only upon the turnover and the tax liability of the company. The turnover of the company increases if the goods have good potential in that area and if i talk specifically about Haridwar then on incoming goods there is no loss on input credit but if the goods are manufactured in haridwar, uttarakhand and then stock transferred outside the state then input to some extent is lost and as such the cost of the goods increases.
CA. RICHI SAXENA
Impact of selling stock transferred goods is only upon the turnover and the tax liability of the company. The turnover of the company increases if the goods have good potential in that area and if i talk specifically about Haridwar then on incoming goods there is no loss on input credit but if the goods are manufactured in haridwar, uttarakhand and then stock transferred outside the state then input to some extent is lost and as such the cost of the goods increases.
CA. RICHI SAXENA
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