A REGISTERED DEALER SAY 'A' OF MUMBAI PURCHASED GOODS FROM 'G1' OF GUJARAT AND WITHOUT TAKING THE PHYSICAL DELIVERY OF GOODS DIRECTED 'G1' TO DELIVER THE GOODS TO 'G2' OF GUJARAT ONLY.
HENCE THE TRANSACTION IS AS FOLLOWS:
G1------->A------>G2 BUT WITHOUT THE PHYSICAL DELIVERY OF GOODS TO A OF MUMBAI.
ALSO, 'G1' IN ITS BILL HAS MENTIONED 'A' AS THE BUYER & 'G2' AS THE CONSIGNEE AND CHARGED GUJARAT LOCAL VAT @ 12.5%.
'A' OF MUMBAI CONTENDS THAT SINCE THIS IS AN OUT AND OUT TRANSACTION AND SINCE G1 HAS CHARGES GUJARAT VAT IN ITS BILL (AND 'A' HAS MERELY BEEN AN MIDDLE PARTY GAINING PROFIT) NO C-FORM OR E1 FORM IS REQUIRED.
IS THE CONTENTION OF 'A' OF MUMBAI CORRECT AND VALID?
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