sr.accounts officer
122 Points
Joined May 2008
Movement from one state to another:In above case when goods are given to carrier or transporter for transportation .the movement of goods starts at the time of delivery to carrier and terminated at the time when delivery is taken back from such transporter /carrier.
As per point two above CST is applicable if sale is done while goods movement from one state to another state.Its called E-1 transaction or sale in transit.
suppose: X situated in Delhi purchased goods from Y in Punjab .Y booked the material on transport and send GR/RR(goods receipt note issued by transporter) to X. X instead of receiving material from transport himself sold the material to Z in Delhi (same state) by endorsing RR/GR in the name of Z. Z takes the delivery from the transporter .
In this case sale from Y to X is covered under CST and X to Z is also covered Under CST as sale in transit.
To complete the transaction X will issue C form to Y ,
Y will issue E-1 form to X
Z will issue C form to X
In the above case even X & Z both are situated in Delhi but the sale transaction is covered under "sale in transit" clause of CST act so CST will be applicable and vat is not be charged.
CST is applicable only if goods movement is from one state to other state .If goods movement is started from one state and ends in same state then CST will not be applicable.