Query on CST on in transit sale of imported sales.

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AP Singh (Querist)
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01 July 2011 I am importer of Lead Acid accumulators (battery) which are being imported from different countries. The material is unloads as Chennai port and we get cleared all the material from the customs. Now my query is this, after clearance of material our goods starts from Chennai port for Punjab state and on transit if the same material is sold out to a person in other State then what will be the CST implication on the purchaser or seller.

S.P.Mahanta

S.P.Mahanta (Expert)
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04 July 2011 Under CST act, inter state sale in transit is allowed.
Goods unloaded at chennai & sold to buyer at punjab can be resold to different buyers at different state in transit.
In such instance, transfer of goods from seller to buyer to precede transfer of documents of title as provided u/s 3(a) & 3(b)of CST act.In each case, subsequent buyer to issue Form C to immediate seller & seller to issue Form E to buyer to be deposited with VAT authorities of respective states. It must be ensured that delivery of goods are taken from carrier by buyer only. This way cascading effect of CST can be avoided.

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AP Singh

AP Singh (Querist)
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05 July 2011 Thanks Mr. S.P. Mahanta for your reply. To make my understanding more clear from below email, I wish to make final confirmation on this-

Let A is exporter from any country who sells material to its Buyer in India.

B is Importer in India who is clearing goods at Chennai Port and has warehouse at Punjab. Subsequently they get the order from C and consignment is still at Chennai Port.

C is the Buyer in Gujrat, who places order to B.

At this instance, B will sell directly to C from Chennai Port by changing its Invoices. (B Company Invoice to Company C) as well as Transport Bilty in favor of Gujrat Company "C".

What we understand from your reply is that No C.S.T is involved in this kind of Sale. Material get Transfered to C instead of B from Port itself.). Is this Right?

Secondly, when material goes to C from Port, Sale Invoices from B to C is sent along with Transport Bilty, Is there any additional need to enclosed viz. Sale Documents of A to B (like import Invoice, Bill of Lading, Bill of Entry etc)?

We are very thankful for your kind concern and favor prevailing to us.