Sale in transit

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This query is : Resolved

SIJU VARGHESE (Querist)

20 November 2013 Dear All,
Pls answer to my query..
A works contractor (Builders), say ‘C’, at Kerala, paying WCT at compounded rate @3%.
They have purchased a Motor Pump for using it in their work site. They have issued purchase order to a party at Mumbai, say ‘A’, as per the instruction of their dealer in Kerala, say ‘B’. A has sold the goods to their dealer B as per the instruction from B and B has sold the same to C.
My queries,
1. Can we say that it is sale in transit?
2. Can we issue C Form to the dealer B? They said they will get Form E1 from A.
3. Is the goods coming under the definition of Capital Goods?
4. If they can issue C Form, then how can they prove to Sales Tax Officer that it is sale in transit? Is copy of Form E1 enough to prove the same?

Thanks in advance

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

20 November 2013 This sale can be an E1 sale. First C of Kerala should have got the water pump entered in the list of authorised commodities in the CST RC.Second, in some states capital goods are restricted by a notification. It is to be seen whether a water pump is a capital asset. Mostly it will not be included. Subject to the above condition you can issue a C form to B and B will give a C form to A.A will issue a E1 form to B and CST is not applicable...mjk

SIJU VARGHESE

SIJU VARGHESE (Querist)

21 November 2013 Thank you sir..

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