Tds on inter-state sales

How can VAT be applicable in inter-state transaction.
Please share additional details.

Originally posted by : CA khushboo
	How can VAT be applicable in inter-state transaction. Please share additional details.

A VAT registered dealer in one state makes a retail sale to a govt organisation of another state. In such case can the govt organisation deduct the vat amount as TDS and make the payment. The goods sold in this case is used by the govt org for thier personal consumption and not resale.

VAt is product tax & INCOME tax is revenue based taxation,
There is no provision for same.
but if your contract is works contract it is possible for them to deduct TDS on the servoce portion of it.
& more over since it is a interstate bill,VAT will not be applicable CST will be applicable

  Some state govt departments are advised to deduct VAT while making local purchases,like tds on works contract bills. Here, as it was a interstate sale no deduction of tds should be made, because such tds amount will be paid to the buyer's state govt ,for  which that govt is not entitled.The interstate seller should inform the govt department of other state that it is not correct and to do stricly as per concerned notification or rule.In fact any tds made should adjustable with the actual tax liability of the seller. In this case it is not possible,because, the buyer and seller are in different states. Even now ,if the concerned department of a govt has not deposited the tds amount to their got it can be refunded to the concerned interstte supplier.Pl check it up fast and ask them to withold the tds amount till the matter is confirmed and later clarify it as per the language of the relevant notification /rule.......mjk  

Thanks Mr. MJ Krishnamurthy.

Where can I obtain the relevant Govt notification/ rule

  It will be available in each department of that govt. You have to get it from them only.You may give them a copy of our opinion and ask them to show you the concerned circular/notification/rule.They will cooperate....mjk