Cst act
This query is : Resolved
03 July 2013
We are manufacturer a taxfree textile goods having 2 branches : 1 at Maharashtra & 2 at Gujarat.
From 01.04.2013 the taxfree product was taxable in Maharashtra State however, Gujarat state remain it taxfree.
Now, we plan to purchase our basic raw material which taxfree material at our 2nd unit Gujarat state, send it to unit 1 in maharashtra for finish against form F as branch transfer and return after finish to our unit at unit 2 at Gujarat again form F as a branch transfer and afterward sales the same from there as taxfree
steps as follows:
1. Purchase taxfree raw material at unit Gujarat
2. Transfer against Form F to unit at Maharashtra for Finish
3. After Finish return to unit Gujarat against Form F
4. Sales to customer from unit Gujarat as taxfree.
Queries are as follows:
1. If we ask the supplier raise the bill at Gujarat and delivery at Maharashtra as raw material is taxfree in all the states then “is it requires to raise invoice (non accounting) in favor of Maharashtra and subsequently issue Form F by Maharashtra unit to Gujarat unit?”
2. What will be (non accounting) Invoice value in material return back to Gujarat unit after finish in Maharashtra unit? Is it raw material value + processing charges or only processing charges value?
3. if we return the material to Gujarat unit as branch transfer against Form ‘F’ and using Form 403 as checkpost or road permit to be required for material enter into the Gujarat state, what will be the importance of Form 403 at the time of obtain Form ‘F’ from Gujarat sales tax department.
we await your valuable advice
From 01.04.2013 the taxfree product was taxable in Maharashtra State however, Gujarat state remain it taxfree.
Now, we plan to purchase our basic raw material which taxfree material at our 2nd unit Gujarat state, send it to unit 1 in maharashtra for finish against form F as branch transfer and return after finish to our unit at unit 2 at Gujarat again form F as a branch transfer and afterward sales the same from there as taxfree
steps as follows:
1. Purchase taxfree raw material at unit Gujarat
2. Transfer against Form F to unit at Maharashtra for Finish
3. After Finish return to unit Gujarat against Form F
4. Sales to customer from unit Gujarat as taxfree.
Queries are as follows:
1. If we ask the supplier raise the bill at Gujarat and delivery at Maharashtra as raw material is taxfree in all the states then “is it requires to raise invoice (non accounting) in favor of Maharashtra and subsequently issue Form F by Maharashtra unit to Gujarat unit?”
2. What will be (non accounting) Invoice value in material return back to Gujarat unit after finish in Maharashtra unit? Is it raw material value + processing charges or only processing charges value?
3. if we return the material to Gujarat unit as branch transfer against Form ‘F’ and using Form 403 as checkpost or road permit to be required for material enter into the Gujarat state, what will be the importance of Form 403 at the time of obtain Form ‘F’ from Gujarat sales tax department.
we await your valuable advice
07 August 2013
pls anyone solve the query
20 July 2024
Based on the scenario described, where you are dealing with tax-free raw materials in Gujarat and taxable finished goods in Maharashtra, here are the responses to your queries:
1. **Invoice Requirement and Form F:**
- Since the raw material is tax-free in Gujarat and you intend to transfer it to Maharashtra for processing, you should ideally raise a non-accounting invoice (sometimes referred to as a delivery challan or transfer document) when the goods are transferred from Gujarat to Maharashtra.
- The purpose of this non-accounting invoice is to facilitate the movement of goods from Gujarat to Maharashtra against Form F. This form is used to claim concessional or nil rate of tax under inter-state sales as per CST (Central Sales Tax) Act provisions.
- The non-accounting invoice should mention the details of the goods being transferred, including quantity, description, value, and other necessary particulars as per the requirements of CST rules.
2. **Value in Material Return to Gujarat Unit:**
- When the finished goods are returned from Maharashtra to Gujarat after processing, the value on the non-accounting invoice should ideally reflect the processing charges incurred at the Maharashtra unit.
- Typically, this would be the value of the raw material (as it was when it left Gujarat) plus any processing charges incurred in Maharashtra. This value should be stated on the non-accounting invoice for the return of goods to Gujarat.
3. **Importance of Form 403 (Checkpost Permit):**
- Form 403 (also known as checkpost permit or road permit) is required for movement of goods across state borders within India. Since you are moving goods from Maharashtra back to Gujarat after processing, you will need to obtain Form 403 from the Maharashtra sales tax department.
- Form 403 acts as a permit ensuring that the goods being transported into Gujarat are properly accounted for and eligible for the concessional or nil rate of tax under CST rules.
- It serves as supporting documentation when you apply for Form F in Gujarat, as it verifies the movement of goods from Maharashtra to Gujarat.
### Conclusion:
To summarize, in your scenario, you should:
- Raise a non-accounting invoice when transferring tax-free raw material from Gujarat to Maharashtra.
- Reflect the processing charges on the non-accounting invoice when returning finished goods from Maharashtra to Gujarat.
- Obtain Form 403 from Maharashtra for the movement of goods back to Gujarat, which will support the issuance of Form F in Gujarat.
These steps ensure compliance with CST provisions for inter-state movement of goods and help in availing the appropriate tax benefits under the law. For specific details and procedural requirements, it's advisable to consult with a tax advisor or GST expert who can provide guidance tailored to your specific business operations and locations.
1. **Invoice Requirement and Form F:**
- Since the raw material is tax-free in Gujarat and you intend to transfer it to Maharashtra for processing, you should ideally raise a non-accounting invoice (sometimes referred to as a delivery challan or transfer document) when the goods are transferred from Gujarat to Maharashtra.
- The purpose of this non-accounting invoice is to facilitate the movement of goods from Gujarat to Maharashtra against Form F. This form is used to claim concessional or nil rate of tax under inter-state sales as per CST (Central Sales Tax) Act provisions.
- The non-accounting invoice should mention the details of the goods being transferred, including quantity, description, value, and other necessary particulars as per the requirements of CST rules.
2. **Value in Material Return to Gujarat Unit:**
- When the finished goods are returned from Maharashtra to Gujarat after processing, the value on the non-accounting invoice should ideally reflect the processing charges incurred at the Maharashtra unit.
- Typically, this would be the value of the raw material (as it was when it left Gujarat) plus any processing charges incurred in Maharashtra. This value should be stated on the non-accounting invoice for the return of goods to Gujarat.
3. **Importance of Form 403 (Checkpost Permit):**
- Form 403 (also known as checkpost permit or road permit) is required for movement of goods across state borders within India. Since you are moving goods from Maharashtra back to Gujarat after processing, you will need to obtain Form 403 from the Maharashtra sales tax department.
- Form 403 acts as a permit ensuring that the goods being transported into Gujarat are properly accounted for and eligible for the concessional or nil rate of tax under CST rules.
- It serves as supporting documentation when you apply for Form F in Gujarat, as it verifies the movement of goods from Maharashtra to Gujarat.
### Conclusion:
To summarize, in your scenario, you should:
- Raise a non-accounting invoice when transferring tax-free raw material from Gujarat to Maharashtra.
- Reflect the processing charges on the non-accounting invoice when returning finished goods from Maharashtra to Gujarat.
- Obtain Form 403 from Maharashtra for the movement of goods back to Gujarat, which will support the issuance of Form F in Gujarat.
These steps ensure compliance with CST provisions for inter-state movement of goods and help in availing the appropriate tax benefits under the law. For specific details and procedural requirements, it's advisable to consult with a tax advisor or GST expert who can provide guidance tailored to your specific business operations and locations.
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