Raw Material As such inter Unit Dispatch

[pareshbhai vasava]

Dear Sir,

We have purchased raw material from regular vendor.

Said material as such we want to transfer our inter unit.

If we generate invoice what about 2% CST is applicable to us ?

What is rules As such Chemical Material ?

your quick reply is highly appreciated.

Thanks & Regards

Paresh Vasava

[Arun Kumar Singh]

Both units are the same owner then you can transfer the goods on challan otherwise cenvat credit can be disallowed.

[YAGAY and SUN]

Dear Paresh,

Registration Certificate Numbers under C.E. provisions for both the units would be entirely different for both the units even under same Management. Further, it the units are located in different States, then, their TIN would also be different. It is advisable to issue an Invoice for removal of inputs as such and pay the duty accordingly or reverse the proportionate CENVAT credit as the case may be. If transferring the stock to other unit then Form F would be applicable under CST Provisions, provided it does not tantamount to pre-conceived sales.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[Karthik Kumar N]

Dear Pareshbhai

First let me introduce my self my name is Karthik recently joined to this forum

Yes below answered by Mr Yagay is correct

If you are transferring excise able raw material to your inter unit than you have to clear it under excise able invoice only & pass on the duty same what extent you have taken credit in your present unit and in Invoice you can mention as "Input Cleared as such"

and if your an assessee under Large Tax Payer Unit than there is no need to pass on because under LTU scheme you have an facility of removing of inputs & Capital Goods from one unit to another without payment of duty/reversal of cen vat credit.

And regarding to CST

CST will applicable only if you sell the goods to interstate but here you are transferring material from your one unit to another unit which is located in another state, hence CST is exempted against Form "F " you have to collect the form F from your interstate unit towards the material transferred (In invoice u can mention as Branch Transfer only not for sale & CST exempted against form F)

Rgds

Karthik

[YAGAY and SUN]

Dear All,

YAGAY and SUN is our firm's name. YAGAY means Vedic Holy Fire and SUN represents here the God Sun, which gives light and heat to the entire world.

There is no Mr. YAGAY in our Consultancy Firm. We are a team of Professionals who looks after Tax/Business/Management related matters. Four years back when we were searching a unique name for our consultancy firms and our search ended with the name of one of ours' colleague son's name. YAGAY=Vedic Holy Fire, SUN=The Hindu God of light/heat and life.

This is for your kind information.

Thanks & Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

AI Summary

Inter-unit transfer of inputs: treat as branch transfer, pay duty or reverse CENVAT credit unless LTU and Form F apply.
Inter-unit transfers of excisable raw materials must be supported by appropriate documents: use a challan for intra-owner movement or an excise invoice and either pay duty or reverse proportionate CENVAT credit unless covered by the LTU scheme. Where units are in different States, treat the movement as a branch transfer for sales tax; CST is exempt if the receiving unit furnishes Form F. Maintain distinct registrations and documentary proof to establish non-sale character and entitlement to exemptions and credit treatment.