Tax treatment on sale from different state

Mahavat 1219 views 4 replies

Prodip Das

427 Points Joined August 2008

Friend, we have H.O in mumbai and having several branches accross different states. We have one branch in MP which has no sales tax registration number, although our H.O is having Vat & CST registration number in Maharastra. For MP office we have procured few furniture items locally and alos transfer other furniture & fixtures from Maharastra which were bought locally in Maharastra.

Recently we are planning to sale a portion of furntiure items from MP office to our client (unregistered dealer) in Bihar. In such case how could I make Sales Invoice from H.O ( Maharastra) to our client (in Bihar). As in MP we have no vat registration number so how could I generate Tax invoice for such transfer of material to our client in Bihar??

Seeking your expert opinion..

Replies (4)

Sunil Kumar G

AGM Taxation

373 Points Joined April 2012

You have two constraints. One is you dont have registration at MP and second thing you cant make any invoice for the stock located in MP from Maharashtra. According to me, if you want to sell furniture lying at MP you have two option,

1) Apply for VAT/CST Registration In MP, after you get the number you can sell with full state Vat to the customer in Bihar. ( Not against C Form)

2) Back the furniture to Maharashtra and sell the furniture from Maharashtra to Bihar under Head office invoice with full state VAT Rate.

CA.Kanhaiyalal Gupta

Taxation Incharge

290 Points Joined October 2011

I am agree with Sunil Kumar

Prodip Das

427 Points Joined August 2008

I have little confusion on it. Doesn't it come under the purview of section 4 of the Act? or couldn't I treat the transaction from H.O as " Sale of goods outside the State"?. Seeking your expert opinion..

Sunil Kumar G

AGM Taxation

373 Points Joined April 2012

As per section 4 of the Central Sales Tax Act, (2) A Sale or purchase of goods shall be deemed to take place inside a state, if the goods are within the state,

(a) in the case of specific or ascertained goods, at the time of the contract of sale is made.

In your case it is ascertained goods and appropriate state is MP. If you want to pay CST to MP Government, you need registration. Un registered dealer cant pay tax.