Sir
We would like to inform you that we have been awarded a rate contract for providing Retail Visual Identity element viz signage at various retail outlets (petrol pumps) of a oil company in Eastern Region.
Under the above contract we have to manufacture , transport, supply and erect signage as per parties specification in all the states in Eastern India It may be noted that in Eastern India Way Bill is applicable for movement of goods in all States and the buyer shall not be issuing the same.
It may be noted that we have manufacturing facility in Kolkata & we shall be executing Work Contract at different retail outlet (Petrol Pump) in different States in eastern India.(The work at site is only of erection ) whereas entire materials shall be fabricated and dispatched from our Kolkata Factory.
Under the above circumstances we would like to know the following:-.
1) If we dispatch the material from our Factory directly to these different R.O.’s /Site of IOC in different States will it be considered as Interstate Work Contract/Sale or not .And whether Lawfully the CST for dispatches to other States is payable in West Bengal or Vat is payable in other states where contract is getting executed .
2) If it is interstate work contract/inter State Sale, shall the movement of goods from West Bengal to other States (where Way bill is applicable for movement of Goods ) without waybill will be legally possible. If yes then how can it be done without way bills and what may be the possible difficulties therein. Further shall the local Commercial Tax office is bound by any law to issue the waybill in that state for Interstate Sale from Kolkata in that particular state in which the goods are moving without asking for Taxes in those States .
3) What if we open Branches in other States (So that we can get Way bills) and transfer the materials to such Branches and then reroute it to the R.O.’s / site of IOC in such States .Shall we have to pay Vat Tax only in such States and CST will not be applicable in West Bengal .Or we have to pay only CST in West Bengal or We have to pay Taxes in both the States.
4) Further if we pay only CST in West Bengal and use the Way Bills in other States of our Branches for transfering goods.Will those States stop issuing Way Bills to us since we are not paying taxes to them .If yes than what is the way out legally.Further is there any astute for stopping our Way bill in those States or for issuing Way Bills when we are not liable to pay taxes there.
5) If under the above circumstances if we have to pay CST in West Bengal and Vat in other States it will be double Taxation for us what is the way to avoid such double Taxation and to arrange for smooth movement of goods in such States were Way Bill is applicable
Thanking You,
With Regards,
Naresh kothari
narsehkkothari @ gmail.com
CAclubindia
