E 1 Transaction

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Ritesh Goyal (Querist)

06 January 2010 Pls advise in case of first seller (A, Delhi) & ultimate buyer(C, Delhi) are located in same state & first buyer (B, Punjab), who will buy goods from A and then sale the goods in transit by way of endorsement to C.

Can this transaction term as E-1 transaction, when A & C are located in same state.

Need urgent reply, if possible.

CA Deepak P. Agrawal

CA Deepak P. Agrawal (Expert)

06 January 2010 For Sale in transit one necessary condition is that goods should cross the border of any state or states. In ur case it will not happen. Hence it cannot be an E-1 transaction.
Regards

Ritesh Goyal

Ritesh Goyal (Querist)

06 January 2010 Dear Deepak,

Thanks for your response.

Another aspect needs to be gone through also..

But we are fulfilling the both the conditions of Section 6(2) and Section 8(4) to get benefit of E1 transaction as our first sale is for interstate sale and subsequent sale is to registered dealer as mentioned is section 6 and Section 8.

request you to put some highlight on this also.

Ram Avtar Singh

Ram Avtar Singh (Expert)

06 January 2010 sales tax applicable on goods movment. goods are moving in delhi state so vat applicable. no sales tax form applicable.

Amit Bajaj

Amit Bajaj (Expert)

12 January 2011 Explanation 2 to section 3 of CST Act provides that where the movement of goods commences and terminates in the same state it shall not be deemed to be a movement of goods from one state to another by reason merely of the fact that in the cource of such movement the goods pass through the territory of any other state.

Since it will not be a sales covered u/s 3 of CST Act it wont be eligible for exemption u/s 6(2)

For more on E1 and E2 sales can refer at the following link

https://amitbajajadvocate.blogspot.com/2010/12/understanding-e1-and-e2-sales-under-cst.html

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