19 February 2011
Y ( Maharastra) order to X(Karnataka)for some manfacturing goods & says the goods should be delivered to Z of Tamil Nadu. X makes the CST bill to Z and in the invoice writes on behalf of Y. The amount is paid by the Y.
1.Whether the X is eligble to collect CST? 2.Whether X has to issue the E1 & to whom? 3.How to reflect the transaction in the VAT-100? 4.Who has collect & issue which Form ?
X will charge CST to Y against C FORM, Y will not charge CST to Z (since it is E-1 sale "Sale in transit")
X will invoice to Y, Y will invoice to Z. Delivery can be done directly to Z after endorsement on Lorry receipt.
On first leg of the transaction, i.e. sale from X to Y, Y will issue C FORM to X. And on second leg, i.e. sale from Y to Z, Z will issue C FORM to Y and X will issue E1 FORM to Y. Hence, to claim exemption from CST Y must receive both C FORM and E1 FORM. While filling returns, you can show it as inter state sale in transit.