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VAT input credit on stock transfers

Deepika (head) (52 Points)

30 March 2010

How VAT input tax credit will be available in case of branch transfer?

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4 Replies

CA KHAN AURANGZAIB (ERP FINANCIAL CONSULTANT) (85 Points)
Replied 30 March 2010

There is no need to calculate the vat liability on Sale. hence in respect of such transfer vat input will not be calculated.

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Deepika (head) (52 Points)
Replied 30 March 2010

Whether we have to pass reversal entry of input vat credit taken on purchases in case of stock transfers?? if yes at wat rate and value??

Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14497 Points)
Replied 30 March 2010

Total input vat credit

_______________ X Stock transfer = input vat disallowed

Total Sale

Its delhi vat rule see your state vat rule.

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K Bala Kishan (Working) (631 Points)
Replied 31 March 2010

In Andhra Pradesh, it is A X B/C where

A = VAT Input Tax Credit available on common inputs

Here available rates are:

12.5% which is divided in to two rates again i.e., 4% and 8.5% where remaining 4% we have to charge off (reverse) because of stock transfers business.

B = Taxable Sales (VAT Taxable Sales / CST Taxable Sales / Export sales including Direct/Subsidiaries/Deemed)

C= Total Sales (Taxable Sales + Exempted Sales [stock transfers])

Hope you understand. Wherever the Business unit having stock transfer business, then to the extent of 4% input tax will be reversed based on the above formula.

Regards,

balu