Vat applicability between firms of the same owners

Yes, of course this transaction would definitely attract VAT as there would be 2 TINs of 1&Co. & 2&Co.. We can't held a transaction as stock transfer unless there is transfer between assesses having same TIN.

If the two companies are formed in different states then CST would be applicable and because (ITC) Input Tax Credit is not available of CST sale it would be costly to sell, So avoid to forming companies in different states.

If the two companies are formed in the same states then you are allowed to take ITC, So there is more benifits to form companies in the same state.

Dear Saurabh,

Many thanks for your prompt reply to my query.

Would you know what form does 2&Co. have to give 1&Co.? Is it Form C or D or something?

Or are these forms for reduction of VAT / CST applicable only in interstate sales?

I am totally ignorant on VAT / CST, thus the naive queries!

Sincerely,

Kunal