Intercompany sales vs intercompany stock transfer

[former_member1042017]

Hi,

Wat is the main differences between

Intercompany sales vs intercompany stock transfer.

More over what are the taxes applicable (India) in both.

In what case VAT/CST will be aplicable and in what case it will not be applicable?

Regards

G A

[former_member550050 · Accepted solution]

Hi

Imagine this scenario

There are 2 company codes,2 sales orgs and 2 plants entire 2 set ups one in UK and another in INDIA

Company code UK and INDIA

Sales orgs UK and INDIA

Plants UK and INDIA

Now For a customer in INDIA and the sales order is registered in Sales org INDIA if the the goods are shipped directly to this customer in INDIA from plant UK which is assigened to company code UK then it is intercomapany sales

Intercompany sales means plant will directly sell or supply to end customer

Now after registering or taking this order from the customer in INDIA and if you transfer the stocks from UK plant to INDIA plant then it is intercompant Stock transfer and after getting the stocks this INDIA plant will supply the end Customer

intercompany stock transfer means the stocks are being shifted across 2 plants of different company codes

The main difference is the same as what is the difference between sales and stock transfer

Sales will happen to the end customer and stock transfer will happen between plants

In Intercomany sales the sales is happening to the end customer directly who is assigned to a different company code

In Intercomany stock transfer stock is moving between 2 plants of different company codes

Regards

Raja

[Former Member]

Dear Gaurav,

Differece between Intercompany Sale and Intercompany stock transfer :

1. ICSale - sales order need to be made with ref to PO made by receiving company code ( mov type 601)

2. ICstock transfer - PO is made in comp code 2 ( NB & mov type 643 ) based on which delivey is made

3. Stock in transit can be generated in ICstock transfer .

Common between Intercompany Sale and Intercompany stock transfer :

1. Sale between two company codes

Tax applicablility :

Tax applicablility is same as normal sale procedure - within state : LST , out side state : CST

Saravanan

[Former Member]

Hi,

the answer for inter company stock transfer is,

As the stock is transfered internally from one location to another location(plant) in same state of same company no VAT/CST is applicable.the process is internally and the documents generated while the cycle(material documents,accounting documents) is for internal updation of stock and values.

Hope its clear for you now.

Regards,

Reddyy

Edited by: REDDYY SD on Jan 28, 2009 10:12 AM

[former_member1042017]

Hi Sir,

I got your answer. Please tell me that If i am doing intercompany stock transfer within the same state in India, then will VAT/CST will be applicable.

As when we normally sells the goods to the customer in the same state, VAT is there.

Regards

G A

[former_member550050]

Hi

According to the model presented by you for intercompany STO with in a single state VAT is applicable and if it is between 2 states both CST and VAT are apllicable

For example within Maharashtra if there are 2 plants which are assigned to 2 different company codes and if there is STO then only VAT is applicable

If there are 2 plants which are assigned to 2 different company codes one in Tamil nadu and another one in maharashtra then only CST is applicable

Note for intercompany there is a pricing procedure and the supplying company charges the receiving company and there is a commercial billing (only in intracompany there is proforma billing)

I need to mention the last point because the post from the other friend was little bit misleading

Regards

Raja