CST on hire charges of reusable packages

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This query is : Resolved

sri (Querist)

20 May 2008 Company's business is to hire reusable packages to its customers.

Customers are in state X and state Y.
Once cusotmer in state X completes his usage, he can send directly to the customer in state Y. If he does so, he has to pay CST as per my understanding.

Hence, to avoid that, we are going to show in the books as if he sent to the company of state x and do a stock transfer (from company in state x to company in state y) ie intra-stock transfer. But in reality customer x directly sends them to customer y.

Is this correct solution. Do you foresee any probelms with this solutioning?

Thanks for your advice.
Sridevi

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

21 May 2008 The hiring charges of reusable packages will be subject to CST as per section 2 (g) (iv).

sri

sri (Querist)

21 May 2008 Hi
Is there any way of avoiding the CST charges?

As I explained earlier, to avoid unnessary transport charges and time waste, we would like to move those packages directly from Customer in Satate X to customer in State Y.

Thanks for your valuable time.
Sridevi

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

21 May 2008 If you are collecting hire charges separately for usage, there is no way you can avoid this

sri

sri (Querist)

29 May 2008 Sorry to trouble you.

If consignment agency or C&F agency got appointed to pickup from customer in state X to Customer in State Y, I guess CST can be avoided. If that is correct, then what kind of other taxes comes into picture?

Thanks for your time/inputs
Sridevi

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

19 September 2008 I have a entirely different opinion regarding CST applicability on such hire charges.
If I am correct, CST will be liable only in the state in which the contract was executed.
I will invite different opinions on this issue.
My mail ID; opg_fca@sify.com

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