Inter state sale

This query is : Resolved

blueraysss (Querist)
Follow

23 August 2008 Hi,

1. we manufaturing goods sold to Interstate customer. Viz.
a} Bill to Interstate.
b} Materials despatch to Local parties.

What is the rate of Tax applicable ( VAT or CST)

CHEZHIYAN

CHEZHIYAN (Expert)
Follow

23 August 2008 ofcourse CST..

if you are going to raise the invoice outside the state then you have to collect CST

CA. Vineet Grover

CA. Vineet Grover (Expert)
Follow

23 August 2008 Applicable rate is CST in your case

Srinath

Srinath (Expert)
Follow

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.

MBA(Fin)_Pranav

MBA(Fin)_Pranav (Expert)
Follow

25 August 2008 Your Transction will attract CST, Current Rate of CST is 2% against Form C or VAT Rate at Seller's state for sales without form C

Regards

Pranav

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
Follow

18 September 2008 I agree with Mr. Srinath.

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.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now