sales under section 6(2) of cst act
This query is : Resolved
23 July 2016
I am in service sector ( X )and C form is not applicable to us. We have to construct infrastructure (capex) for our business. (1) We engaged a contractor (Y), (2) contractor is from Maharashtra ,supplier (Z) is from Gujarat and consignee/we are from Odisha, all are registered dealers, (3) can Y do the CST sales u/s 6(2), (4) where Y in exempted from changing of CST, (5) Y buys Goods from Z without form-C/ with full CST and in transit do the transfer of title to X, (6) X will only reimburse the CST of Z to Y , (7) Y will collect E1 from Z and no form-C from X as there in no sales under form C.
Can in this way a transaction can happens, kindly advice.
Can in this way a transaction can happens, kindly advice.
29 July 2016
Can any expert pay attention to my query...
14 July 2024
Based on the details provided, it seems you are dealing with interstate transactions involving contractors (Y), suppliers (Z), and your own company (X), all registered under GST and engaging in transactions related to construction and infrastructure development. Here’s a breakdown and clarification based on the points mentioned:
1. **Contractor (Y) Engaging Supplier (Z)**:
- Y, the contractor from Maharashtra, engages Z, the supplier from Gujarat, for purchasing goods required for the construction project in Odisha (where X is located).
2. **CST Sales under Section 6(2)**:
- Section 6(2) of the Central Sales Tax Act, 1956, allows for certain interstate sales to be taxed at concessional rates or exempted from CST under specific conditions.
- Y, being exempted from charging CST, can procure goods from Z in Gujarat without charging CST if they provide a declaration to Z.
3. **Procurement and Transfer of Title**:
- Y buys goods from Z in Gujarat. During transit to Odisha, the title (ownership) of these goods transfers to X.
4. **Reimbursement of CST**:
- X, being the consignee and located in Odisha, will reimburse the CST paid by Y to Z. This is typically done as part of the invoice settlement between Y and X.
5. **E1 Form and Documentation**:
- Y will collect an E1 form from Z. The E1 form is issued when goods are sold for interstate movement and helps in claiming CST exemption or concessional rate.
- Since X is not eligible for Form C (as C form is not applicable in your sector), there won't be a Form C involved in this transaction.
6. **Process Summary**:
- Y procures goods from Z in Gujarat.
- Y moves these goods to Odisha for use in construction for X.
- Y collects an E1 form from Z to claim CST exemption.
- X reimburses Y for the CST paid to Z.
**Important Considerations**:
- Ensure all transactions are properly documented with invoices, transport documents (like E1 form), and agreements.
- Compliance with GST laws, including invoicing requirements, GST rates, and input tax credit eligibility, should be ensured.
- Verify with your GST consultant or tax advisor to ensure all aspects of interstate transactions and CST exemptions are handled correctly.
By following this structured approach and ensuring compliance with relevant GST regulations, your transactions involving Y (contractor), Z (supplier), and X (consignee) can proceed smoothly within the framework provided.
1. **Contractor (Y) Engaging Supplier (Z)**:
- Y, the contractor from Maharashtra, engages Z, the supplier from Gujarat, for purchasing goods required for the construction project in Odisha (where X is located).
2. **CST Sales under Section 6(2)**:
- Section 6(2) of the Central Sales Tax Act, 1956, allows for certain interstate sales to be taxed at concessional rates or exempted from CST under specific conditions.
- Y, being exempted from charging CST, can procure goods from Z in Gujarat without charging CST if they provide a declaration to Z.
3. **Procurement and Transfer of Title**:
- Y buys goods from Z in Gujarat. During transit to Odisha, the title (ownership) of these goods transfers to X.
4. **Reimbursement of CST**:
- X, being the consignee and located in Odisha, will reimburse the CST paid by Y to Z. This is typically done as part of the invoice settlement between Y and X.
5. **E1 Form and Documentation**:
- Y will collect an E1 form from Z. The E1 form is issued when goods are sold for interstate movement and helps in claiming CST exemption or concessional rate.
- Since X is not eligible for Form C (as C form is not applicable in your sector), there won't be a Form C involved in this transaction.
6. **Process Summary**:
- Y procures goods from Z in Gujarat.
- Y moves these goods to Odisha for use in construction for X.
- Y collects an E1 form from Z to claim CST exemption.
- X reimburses Y for the CST paid to Z.
**Important Considerations**:
- Ensure all transactions are properly documented with invoices, transport documents (like E1 form), and agreements.
- Compliance with GST laws, including invoicing requirements, GST rates, and input tax credit eligibility, should be ensured.
- Verify with your GST consultant or tax advisor to ensure all aspects of interstate transactions and CST exemptions are handled correctly.
By following this structured approach and ensuring compliance with relevant GST regulations, your transactions involving Y (contractor), Z (supplier), and X (consignee) can proceed smoothly within the framework provided.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- TDS on Purchase of Immovable Property by NRI from NRI
- Stamp Paper for partnership firm change new income tax 2025
- Capital gain from sale of house property
- SFT Cash Deposit in Current Account
- Copyright software
- When TDS on GST applied
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
- Updated return in budget 2026
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
