sales in transit

This query is : Resolved

shree (Querist)
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06 June 2009 example : dealer- culcutta, supplier- hyderabad & user-maharashtra

If hyderabad manufacturer send the material directly in maharashtra by showing in invoice the buyer(dealer-culcutta) & consignee(user- maharashtra) & culcutta dealer raised the commercial invoice to maharashtra by claiming C-FORM by adding it's margin, then what will be the billing structure & tax details.

BeyondConsultants

BeyondConsultants (Expert)
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06 June 2009 this is not a E-1(in transit sale) and cst is payble on both transactions.

As per Supreme court.

For solution contact me at nikhil.gupta513@gmail.com

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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07 June 2009 This is sale in transit u/s 6(2) of the Central Sales Tax Act.

The Mumbai dealer will issue form 'C' to Calcutta Dealer.

The Calcutta Dealer will issue form 'C' to Hyderabad dealer.

In return the hyderabad dealer will issue from "E-1" to Calcutta Dealer.

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Parveen Bansal

Parveen Bansal (Expert)
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09 June 2009 IF we follow this transaction structure,two sales transactions occurs:

1. From Hyderabad supplier to Calcutta dealer.

2. From Calcutta dealer to Maharashtra user.

Accordingly, CST becomes applicable on both transactions.

To save on application of CST on second transaction, nothing should be mentioned for Maharashtra user on consignment documents and invoice. After goods are dispatched by Hyderabad supplier,consignment documents should be endorsed in favor of Maharashtra user. It will become sale in transit and will be exempted from CST.