VAT reversal on stock transfer should be automatic process instead of current manual process in the Indian version of Microsoft Dynamics AX 2012 R3

After you install this hotfix, you have to do some basic setup for Input VAT reversal in General ledger parameter. During posting of transfer transaction and to default the Input VAT reversal information, you must assign a unique batch number to the purchase order or purchase order lines. On selecting the appropriate batch number in stock transfer order, the reversal information will default automatically from the original purchase invoice line. At the time of posting shipment, invoice tax amount will flow to input reversal expense account and immediately through related voucher VAT reversal expense account will be posted to the inventory account.

In case you do not want to transfer VAT reversal expense amount to Inventory account, you can unmark the Post inventory parameter in General ledger parameters else user can go and unmark check box in stock transfer header setup tab page for any specific transaction.