Sale in transit on Local purchase

This query is : Resolved

Mitul (Querist)
Follow

02 January 2010 We are purchasing goods from a local party say "A" and selling the goods to party say "B" based in other state.
Can we make a sale in transit to B.
Goods are directly transported from A to B
Which forms are to be collected if the sale is treated as sale in transit

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
Follow

02 January 2010 You cannot make sales in transit on the local purchases you have made until the same is in the series of transit sales. If goods are directly transported to b from a , then it is a central sales by A. This sales is not a transit sale.

CA Deepak P. Agrawal

CA Deepak P. Agrawal (Expert)
Follow

04 January 2010 DIFFERENCE IN OPINION....
For sale in transit it is necessary that Goods should get directly transported. In current ex. from A to B and one most imp condition is that the goods should cross the border of any state.
A will issue a bill to you and charge you 2% CST. You Will issue Sale Bill to B and no tax will be charged. On you bill "Sale in Transit" should be written. Lorry Receipt should be made by Consigner A to Consignee B on account of you.
You will collect C form from B.
You will give C form to A.
And A will give E1 form to you.
Regards.

Message likes : 1 times

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
Follow

05 January 2010 Difference in opinion
Sir, Your Case comes under predetermined sales and not in sales in transit. In case of sales in transit,subsequent sales must be occassioned through transfer of documents.

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