If the seller is registered under CST in the state of Maharashtra and the buyer is registered under CST in Gujarat, Seller raises the invoice from maharashtra office and despatches the goods from Gujarat godown. Whether CST or LOCAL VAT shall be applicable?
1. If local VAT is applicable then the rate of which state shall apply?
2. Whether buyer in Gujarat can take input vat credit?
Dear Hardik,
Your Problem is not cleared why seller send goods to Gujarat Godown whehter it is stock transfer or other thing. please write me clearly sothat i cna help you my email id is sachinagarwalcallb @ gmail.com
I think you are mixing two things in a transaction. Pls. note that in a transaction either vat is applicable or cst is applicable. The rate of tax would charge on the basis of movement of goods starts (Origin of sale) not destination of goods. The input credit can be claimed only in local sales by the buyer and it is not applicable in cst.
If u want more, pls. clearly specify.
If the goods are despatched from the Gujarat Godown, it is a transaction under Gujarat VAT and the invoice has to be raised from Gujarat. If a Tax Invoice is raised then VAT Credit will be applicable to the Buyer.
HOwever, the Buyer can send the payment to Maharastra.
If the manufacturer/main dealer/trader/head office is in maharastra then trsf of gds to its branches via form 'F'. Hence while billing the invoice, its should be Gujrat's. So the buyer can take the input credit as per the VAT rules of Gujrath.
In case the seller just send the gds excl. for delivery purpose through there godown in Gujrath then u need to rise invoice with CST. There is no benifit of Input.
Rahul Dang & Associates-Chartered Accountants
Pune
CA Inter
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