Vat or cst

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Esha Dhingra (Querist)

20 April 2014 Hi Experts,

I am starting an E-Commerce company based out of Bangalore for which I am dealing with some other state Vendors eg, Delhi, Maharashtra and Punjab. My query is if I while staying in Bangalore procure products from these other state vendors for re-sale on my site what Tax will be applicable (VAT or CST) or both. If its VAT then which state VAT will be applicable.
Kindly help with your advice

Regards,
Eesha

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

20 April 2014 Ms Esha Dhingra,
It depends upon how you deal with the products.There are two types of transactions. 1) Directly buying and selling.and 2) changing the brand name or adding some more material to make a new product for selling. In the first category you may make both VAT and CST sales.When you receive the purchases in your state and sell locally/within the state it will be VAT sale.You may ask your vendor to make a transit sale(E1),as a CST sale,avoiding VAT. This has to be done to a registered dealer and against 'C' form.In the second category,although bought from a vendor it becomes your own and you may make VAT sales for local and CST sales for interstate customers....mjk

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