Sale-in-transit (e-1 transaction)

VAT (Legacy) 670 views 3 replies
"A" is a seller in Rajasthan, "B" is the customer of A in Ahmedabad, "C" is the ultimate buyer in Ahmedabad. "A" raises an invoice by keeping "B" as the "Buyer" and "C" as the "Consignee". A charges 2% CST in the invoice. This is an E-1 transaction u/s 6(2) of CST Act. "B" raises a commercial invoice on "C" selling the goods by without adding any profit and charging any tax(subsequent sale is exempt). All formalities of E-1, C form and transfer of LR [u/s 3(b)] has been done between the parties. My question is: The CST paid is the cost of "B" or "C" ? Who will record the CST charged? "B" or "C"? Can "B" recover the amout of CST paid by him from "C" by separately charging CST of the same amount in the invoice of Basic Cost issued by him to "C"? Or will it be proportionately included in the cost/unit in the invoice?
Replies (3)

A is the seller.

B is the customer.

A has acted on the instructions of B to deliver the goods to C directly. For C, no tax shall be payable since it gets covered in the second leg of the transaction.

 

CST @ 2% shall be recorded in the books of B , since for A the basic transaction is the delivery of goods by A in Rajasthan to B in Gujarat. The delivery of goods to C is a subsequent instruction by B to A .

 

Also CST is levied when there is an occasioning of movement of goods from one state to another state , which in current case is happening from Rajasthan to Gujarat.

Sir, what if, there is no presentation of E-1 form by 'A' to 'B' ?? Can 'B' charge VAT in the sales invoice from 'B' to 'C' ??
If there is no presentation of E-1 form then the transaction would be treated as if the sale happened witin the state and the tax would be collected by the department at RNR of the state.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details
Company
23 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
Featured 15 June 2026
Senior Auditor

N. Dhawan & Co

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 23 May 2026
Article Assistants

Acupro Consulting

Gurgaon

CA Inter

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
26 May 2026
CA / MBA (Finance) / CMA / M.Com (Finance)

Sri Aurobindo Gnostic Centre of Education

New Delhi

CA

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
09 June 2026
Accounts Associate

S Madan and CO

New Delhi

Graduate (Any)

View Details