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Branch stock transfer

CA AJAY GUPTA (PRACTICE) (86 Points)

16 July 2009

First One

My query is regarding Branch Stock Transfer. Can a person transfer FOC/ Free of cost publicity material/demo items as stock transfer to other branches, under the cover of branch stock transfers. The document for the same also named as Stock Transfer Note and no separate serial no is maintained for FOC items and normal stock trfr.

Second one:

Can a person issue Tax/ Retails Invoice for FOC/POS (Publicity Material) Material

Pl. reply urgently, with support of any citings or announcements.

Thanx a lot

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17 Replies

Binod Kumar Sinha (COMMERCIAL DEPARTMENT) (141 Points)
Replied 16 July 2009

Dear Mr. Ajay Gupta.

You can transfer publicity materials to one branch to another branch but you have to make seperate challan for promotional material and make a self declaration for THERE IS NO COMMERCIAL VALUE and ONLY FOR INSURANCE PURPOSE VALUE Is RS>.............

In Indore Road Permit is essential for Transfer of Promotional Materials but another state not essential .

For this purpose you can not issue a TAX/Retails Invoices because you are not selling the said product to another and its commercial value is nil and also you have not received any consideration for this.

If you have any query please revert back.

Thanks with Regards,

Binod Kr. Sinha.

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sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 17 July 2009

Opinion of Mr Binod Kumar Sinha is right

Anupam Majumder (officer sales tax) (28 Points)
Replied 27 October 2009

Suppose an unit is manufacturing & trading Oxygen Gases. It has 2 branches in India. One in Mumbai and another one is Kolkata. Now the Kolkata Unit needs 2 Oxygen Cylinders for its own use and it advises Mumbai branch to make a branch transfer. The Mumbai Unit send 2 Oxygen Cylinders to Kolkata Unit.

Now because the Cylinders were not used for trading purpose and only for own use, the Kolkata Unit refuses to issue any F Form to Mumbai Unit. Is it valid? Please advise.

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 27 October 2009

when a stock transfer is made the purpose is immaterial kolkatta unit must give F Form to Mumbai unit

Anupam Majumder (officer sales tax) (28 Points)
Replied 27 October 2009

Dear Mr. Sivaram,

Thank you for your reply. Is there any specific rule or case law regarding the same. It would be very helpful for us.

Regards.

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sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 27 October 2009

Mr Majumdar.

I am not an expert it is generally understood when an interstate stock tansfer is made the receiving unit should give F form to the sending unit and i dont have any case law to support the same.I think there is one expert I Think he is Mr Ram Avtar Singh in expert column just post this and get his views immediately

Anupam Majumder (officer sales tax) (28 Points)
Replied 27 October 2009

Dear Mr. Sivram,

Thank you once again for your reply.

Actually our logic is, there are 4 (now 3) types of declaration form in Sales Tax. C, D, E,F. In case of nonissuance of C form we shall have to pay additional tax, For D form (now it is withdrawn), we also have to pay the additional tax amount if not received from the Govt., E form is also used for Subsequent Sale & if we fail to submit we have to pay full tax on the Sale value, which charged to the customer @ 0%.

Now, if we fail to submit the F Form, then what will happen?

As per Invoice & LR it is clearly shown that the goods moved from one branch to another branch and a company can not sale to himself. Hence the authority should not charge any VAT or CST against such movement. But what they can? If receiving branch sale that goods they can treat that sale as a sale of the transferree branch (Mumbai) & claim tax from them.

There should be some specific rule or act on it, otherwise a departement can not waste its stationery unnecessarily. However we thank you for your valued reply & expect to get the same in future as per our requirement.

Best Regard

Mahantesh (Sr . Manager) (23 Points)
Replied 16 January 2010

which form to be submitted for branch stock transfer under KVT, withen state

Binod Kumar Sinha (COMMERCIAL DEPARTMENT) (141 Points)
Replied 16 January 2010

Stock transfer cannot be processed within state if we want to stock transfer within state it could be done
upon "delievery challan"

With Regards,

Binod Kr. Sinha

Asharani (In practise) (72 Points)
Replied 29 January 2010

Dear MrBinod Kr. Sinha. What if goods are send to the Customers place for Demo Purpose. Is there a procedure defined in MVAT as the same is defined in Excise. Can the goods be sent to the customer a different sate for demo purpose on the basis of delivery challan. Regards