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.

AI Summary

Clarification on VAT: Job Work vs. Stock Transfer for Inter-Unit Transactions Between Manufacturing Units Under VAT Rules A company with manufacturing units in Uttar Pradesh (Unit I) and Haryana (Unit II) is dealing with VAT treatment for transactions where Unit II sends materials to Unit I for job work. The query seeks clarification on whether this transaction should be recorded as job work or a stock transfer in VAT returns. The response indicates that if the processed materials are returned to Unit II, it is considered job work. However, if the materials are further manufactured and dispatched from Unit I, it should be treated as a stock transfer.