Treatment of Vat

[Dharmender Batra]

The company is same having unit I in UP and unit II in Haryana. Both the units are manufacturing units registered with Central Excise. Unit II is purchasing the material and sending it for job work to unit I. what will be the treatment of this transaction in the vat return of both the units, particularly of unit I, in UP. will it be like job work done of any other party or will it be treated as stock transfer in the sales tax return of both the units.

[Madhukar N Hiregange]

If you are going to recive the same back then it would be job work. If further manufactured and despatched fromthere then stock transfer.

AI Summary

Job work treatment applies where inputs are returned after processing; otherwise the movement is a stock transfer for VAT purposes. Where Unit II sends material to Unit I for processing and the same goods are returned to Unit II, treat the transaction as job work in Unit I's VAT return; if Unit I further manufactures and despatches the processed goods from Unit I to others, treat the movement as a stock transfer and report it accordingly in the sales/VAT returns of both units.