Cst on stock transfer

We have placed a order(contract already signed) on a firm based in Chennai for supply and erection of Equipment in Aligarh.

The firm is manufacturing goods in Cheenai and supplying to its ware house in Aligarh as stock transfer and asking VAT aagianst sale of goods

from Aligarh Warehouse.We are saying that since we have already entered agreement with you for supply of goods prior to dispatch of material

from Chennai works to Warehouse of firm is Aligarh , so its not a stock transfer but sale of good from Chennai, so CST is aplicable.Plz clarify

what is the solution.We are small Businessman and unaware of nitty gritty of CST/VAT.

Plz help.

Replies (1)

VAT is destination based. So origin & destination are important to decide whether it is CST or VAT. 

Here goods origin from Chennai (Assume it is owned by Mr. A) he is transferring to warehouse in Aligarh (again owned by A). Transaction is complete and it is considered as stock transfer. 

When goods move out from Aligarh Warehouse of A to the site where it is errected it will be a normal VAT sale. 

Hope this solves the issue.

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