Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Forms required for inter-state sale

Arun (Manager) (60 Points)

25 August 2011

Hello Experts,

I sell clothes (innerwear and other women's clothing) online from my office in Bangalore. I have a VAT/CST number. All my goods are imported. I get orders from other states occassionally. I use a courier service to deliver the item to the customer (consumer, not dealer). In such cases:

1. what are the taxes I have to pay (KVAT, CST?) and at what rates?

2. what forms do I need to generate and submit for these transactions (waybill, form c, etc)?

3. can I offset VAT/CST with the duty I have paid for import?

Any help would be great.

Thanks.

Reply
Follow
Share

7 Replies

Kapil Dev (Manager Indirect Taxes) (65 Points)
Replied 25 August 2011

1. Given the facts of your case you will charge KVAT and not CST

2. In case of retails sales not forms is required

4. You can not adust duty against VAT. I donot know whether You are paying Special Additional duty which is 4% and is levied in lieu of VAT or sale sales Tax. From last year onward the government has stopped leving this if goods are meant for resale subject to fulfillment of certain condition. Pls check the Bill of entry if you happen to pay SAD then same available to you as refund from custom authoritires subject to fulfillment of certain condition See notification 102/07 for details

1 Like

Arun (Manager) (60 Points)
Replied 25 August 2011

Hello Mr Dev,

Thanks for the response.

So, in case of selling from one state to the end consumer in another state, CST is not required?

Thanks.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 25 August 2011

In case of interstate sales to consumers in other states, only CST is applicable not KVAT. It is sale without C form therefore the local VAT amount of 5% is applicable to this CST sales also. You have to show such sales as "interstate sales" and show CST @ 5%. On the otherhand, if the party/consumer himself comes to your place and takes the material (this is called situs of sale) and books thro courier in his name as sendor to self , then it is called as local sales. Because the sale transactions ended at the doorstep of your shop and he takes delivery from there and books the consignment to his place.

rengaraj r.k

1 Like

Arun (Manager) (60 Points)
Replied 25 August 2011

Mr Rengaraj,

Thanks.

So, does the CST rate depends on the VAT for the item in the destination state? Or, is it a fixed rate irrespective of the destination state?

Also, when sending the item through courier, do we have to attach a waybill or should the invoice itself be sufficient if it shows that it is an interstate transaction?

Thanks.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 25 August 2011

Dear Mr Arun,

The selling state rate is applicable for CST. For E.g if the rate of karnataka for this item is 14% then the cst sales without c form (i.e sold to customer) is 14%; where as if it is sold to dealer who can submit c form for this sales, the rate of CST is only 2%. The destination state does not apply for interstate sale transaction.

When sending them thro courier it is enough if you send a valid tax invoice showing CST separately in the invoice along with way bill (Here way bill is booking slip of the courier). TheKarnatka Government has announced certain e-sugam forms for sending and for receiving the materials from/to other states. Kindly visit karnataka VAT website and find out whether your commodity is listed there for using e-sugam online forms for interstate tramsactions. If the value of your interstate consignment is less than rs.5000.00 there is no need for such forms.

Kindly visit the website and update.

Hope it is clear.

rengaraj r.k

1 Like