Dear All
Below pated is the typical explaination for Inter State Sales wherin Form C, Form E-I/E-II used.
But I wanto to know when subsequent sales are made using Form E-II, are subsequent sellers in the chain will add their profit and expanses levied on the movment of goods? . If we consider the below given example itself, will X and Y who participated in between had added their profit to the goods at their stages?
My question maybe very silly kind, but i dont know about it please let me know Sirs.
Declarations in E-I and E-II form - As per section 6(2) of CST Act, first Inter State sale is taxable. Subsequent sale during movement of goods by transfer of documents is exempt from tax, if the subsequent sale is to Government or a registered dealer. This is subject to condition that such subsequent seller obtains declaration (a) from the selling dealer i.e. from registered dealer from whom goods were purchased. (b) from purchaser a declaration in C form or declaration in D form. The selling dealer has to make declaration in E-I form if it is a first sale and in E-II form if it is a subsequent sale. One example will clarify the requirements. Assume that W despatches goods from Karnataka to Orissa and raises invoice on X in Madhya Pradesh, W charges 4% CST and pays the same in Karnataka. During movement of goods, X sells goods to Y in West Bengal and Y ultimately sells goods to Z in Orissa. Z takes delivery of goods and the ‘movement of goods’ comes to end. Sale from X to Y and Y to Z is by transfer of documents. In this case, W will receive declaration in ‘C’ form from X and will issue declaration in ‘E-I’ form to X. Later, X will issue declaration in ‘E-II’ form to Y and receive declaration in C form from Y. Finally, Y will issue declaration in E-II form to Z and will receive declaration in ‘C’ form from Z, which will complete the chain. If the chain is broken, CST will be payable again.
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