Taxability of contract executed out of the state

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Mahesh (Querist)

26 December 2013 Dear Members
I'ld like to know the taxability of Sales if the sale is out of the state and there is no transfer of property in goods from one state to another...

In case of one of my client, He executed one contract in Tamil Nadu. He is a registered dealer in Maharashtra State. He purchase all the material in Tamil Nadu including Labour... now problem i am facing is that particular sale cannot be treated as OMS sale as there is no transfer of property in goods from one State to another State..
He is not register dealer in Tamil Nadu..
So in this case as per my interpretation this sale is not a local sale so not taxable in Maharashtra state and not OMS Sale as no From "C" will be issued...

And if my interpretation is right how should I report the same in Audit Report in "Form 704"

Thanks

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

26 December 2013 A Maharashtra dealer goes to TN and executes a contract work.He arranges purchases of all material within TN itself and labour is also of TN only.This is what you say. In this case your friend has to register in TN under TNVAT Act.He should file returns in TN and pay tax accordingly.There is no question of interstate WCT sale or C forms issue.Your client has to declare TN work as a branch and account it separately. This need not be reflected in form 704 of Mahavat.Form 704 pertains to business done in Maharashtra only.The TN work has to be dealt as per TNVAT Act prvisions.....

Mahesh

Mahesh (Querist)

27 December 2013 Thank You very much Sir....

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