Venus Home Appliancesd Private Limited, Chennai had purchased 2 Air Conditioners for Rs. 25,000 each from Williams Refrigeration, Bengaluru which had to be despatched to the consignee Aifso Enterprises of Odisha. On 9-4-2012, during movement of goods, Venus Home Appliances Private Limited sold the same air conditioners at Rs. 28,000 each to Aifso Enterprises, vide invoice number 05. Venus Home Appliances Private Limited received ‘C’ form from Aifso Enterprises and issued ‘E–2’ form.
The book says the following entry will be passed in books of Venus:
Aifso Enterprises Debit 56000
To Interstate sales - Form E2 credit 56000
And Venus Home Appliances will issue form e2 to Aifso and receive form c from Aifso enterprises.
My questions are:
1. This shouldn't be a E2 transaction in books of Venus. Hence the entry passed in book is wrong.
2. This is E1 transaction in books of William refrigeration.
WIlliam refirgeration will charge Cst to Venus.
William will give form e1 to Venus and get form c from Venus.
3. In books of Venus it is exempt under section 6(2).
It is not e2 trasnaction in books of Venus as aifso has not sold goods to any other party say XYZ in west Bengal while goods were in transit.
Venus will not charge any vat or CST from Aifso.
Venus will only get form c from aifso.
Venus will NOT give any form e2 to aifso.
Shivani
CAclubindia
