24 August 2008
Hi, I beg to differ. When you bill interstate and deliver the goods locally, the local VAT rate applicable to goods. Please note to qualify as Interstate sale, the criteria for movement of goods from one state to another is important. In this case, this condition is not fulfilled. The sale will, therefore, be treated as local sale. Applicable VAT rate has to be charged and not CST rate.
CST is applicable only on sales made in course of interstate trade and commerce, and for the same it is must that the sale must ocassion the movement of goods from one state to another. Please refer Section-3 of CST Act, 1956, which reads as under;
When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce.-A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation I.-Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2.-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 course of such movement the goods pass through the territory of any other State.
CAclubindia
