Sale of imported machinery without vat/cst registration

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2012 We have imported A Mining Equipments in 2010.But we haven't take any Sales Tax Reg as it was meant for Service.As the plan not matured we want to dispose the Machine.As it is a occational sales and we have not CST Reg.Can we sell it without charging Sales Tax ?
In that case whether buyer will face any problem ?

A Datta

RENGARAJ R.K

RENGARAJ R.K (Expert)
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24 June 2012 Are you a regular importer? Whether invoice/bill of entry is in the individual's name? What is the value of the imported machine in INR?

The buyer will not be in a position to avail any input tax credit and there will not be any problem as long as it is a second hand machinery.

rengaraj

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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22 July 2025 Here’s a detailed answer for your query on sale of imported machinery without VAT/CST registration:

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### Sale of Imported Machinery Without VAT/CST Registration

1. **Your Situation:**

* You imported mining equipment in 2010.
* You did not obtain VAT/CST registration, as it was for service purposes.
* Now you want to sell the machinery as an occasional sale.
* You do not have CST registration.

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### Key Points:

* **VAT/CST Registration Requirement:**

* Generally, **VAT/CST registration is mandatory if you are engaged in selling goods**.
* However, **occasional sales** of capital assets (like machinery) may not require registration or tax charging if you are not otherwise engaged in regular trading activity.

* **Is Sale Without VAT/CST Charging Allowed?**

* If you are **not registered**, you cannot charge VAT or CST legally.
* Occasional sales by a person **not engaged in business of selling goods** typically do not attract VAT/CST.

* **Buyer's Perspective:**

* Buyer may face issues if they want to claim input tax credit (ITC) because:

* Your sale invoice will not have VAT/CST charged.
* Without tax invoice, buyer cannot claim credit.
* Buyer must decide if they are willing to purchase **without input credit**.

* **State-Specific Rules:**

* Some states may have provisions requiring even occasional sellers to register if value exceeds threshold.
* Verify with local sales tax department.

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### Summary Table:

| Situation | Your Obligation | Buyer’s Concern |
| -------------------------------- | ------------------------- | ------------------------------------------------ |
| Occasional sale, no registration | Can sell without VAT/CST | Cannot claim input tax credit |
| Regular sale, no registration | Illegal, penalty possible | Buyer risks purchasing without valid tax invoice |

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### Recommendation:

* Check local VAT/CST laws for threshold and occasional sale provisions.
* Inform buyer about **no tax charged invoice** and no ITC eligibility.
* For better compliance and to ease buyer concerns, consider **obtaining VAT/CST registration**, if you plan to sell machinery again.

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If you want, I can help draft a sample sale invoice for such an occasional sale or a letter explaining tax status to the buyer!

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