Transit sale

Dear Jeevesh

P can do that. Delear C has placed an order to P where consignee is K. Then on the behalf of C , manufacturer P will raise the invoice under rule 11 stating account to M/s C and Consignee to M./s K.. So goods will reach at premise of K. 

In this case P will ask the invoice value from C not from K. K will issue a commercial invoice for realiasion of payment to K. giving the refrence of invoice of P.

This sale is called sale in transit and in terms of sales tax it is  E-1 sale.

Regards

Procedure suggested by Harendra is the correct procedure.

However, on this procedure true manufacturers price will be known to the ultimate buyer.

Dear Harendra,

 Please clarify this  " K will issue a commercial invoice for realiasion of payment to K. giving the refrence of invoice of P"  from ur advice .....

and dear Rajesh---- C does not want to disclose his margin to K... what is the best possibility...

also please clarify the sales tax implication on this ...

regards

Sir, 

..... can "C" send his invoice to "P" and goods are moved with invoice of C endoreced by P.  and P raises seprate invoice on C. ? 

Dear Jeevesh,

Rectified By mistake I have mentioned K instead of C 

"C will issue a commercial invoice for realiasion of payment to K. giving the refrence of invoice of P"  

Best Regards

Dear Jeevesh

As per your second statement regarding endorsement, I would like to mention you it is not right. There is other way you can also adopt.

1. Ask P to raise an invoice in your name acoording to your PO and  hand over the goods to your transporter godown in ponichery .

2. After the proper entry in register you can raise an invoice according to your price as settled with K. and you can hand over your invoice to your transporter to send it to premise of K.

Sales tax point of view

Ask the inward form from K and enclose it with your invoice before handing over to your transporter.

Best Regards

Thanks alot for your valuable advice ..

 take care

Dear Jeevesh

Care in what sence...

Best Regards

Sir... can we support our opinion with provisions from Acts or rules ?

Sir... it was an general TAKE CARE...

Dear Jeevesh

According to me, As you know that before acting anything,  We should keep the rule in mind. In the case of sale in transit these are the procedure which I have creified to you.

Further Mr Rajesh kumar will explain you.

For Mr. Rajesh : Sir,  Please consider the case as discussed with Mr. Jeevesh & me. If there are any procedure laps then please guide us.

Best Regards

Transit Sale in Central Excise:

Transit sale procedure has been explained in CBEC circular 96/7/95 dated 13.02.1995. The circular clearly says that when the whole consignment is dispatched to a buyer, cenvat will be available on manufacturer invoice to the final buyer shown in the invoice as consignee. The invoice shall be issued in the name of buyer (trader in this case). Goods need not be brought to the traders place and traders invoice is not required for availing cenvat.

In circular 218/52/96 dated 4.6.1996, it was further clarified that the intermediate trader is not even required to be registered as dealer of central excise. The view has been upheld in various judgments notably in stadmed [1998 (102) ELT 466], Curies [1999 (112) ELT 539]. In fact pune commissionerate trade notice 76/95 dated 20.7.1995 specifically prohibits issuance of cenvatable invoice in such cases as the trader is not receiving the goods. Off course, the intermediate trader can issue commercial invoice to the final buyer for payment/accounts purposes.

Receipt of goods is extremely important in Central Excise. Sale/purchase has been defined in Central Excise [Section 2(h) of the Central Excise Act] as transfer of possession of goods. In the present case the intermediate dealer is never receiving the goods, never getting the possession and hence in the eyes of Central Excise Law, not a buyer or seller of goods.

These points has been examined in one of my papers published in Excise Law Times, "Who is a first stage dealer" [2005 (186) ELT A55]. If possible, look into the paper, it may be helpful. 

Transit sale procedure has been explained in CBEC circular 96/7/95 dated 13.02.1995. The circular clearly says that when the whole consignment is dispatched to a buyer, cenvat will be available on manufacturer invoice to the final buyer shown in the invoice as consignee. The invoice shall be issued in the name of buyer (trader in this case). Goods need not be brought to the traders place and traders invoice is not required for availing cenvat.

In circular 218/52/96 dated 4.6.1996, it was further clarified that the intermediate trader is not even required to be registered as dealer of central excise. The view has been upheld in various judgments notably in stadmed [1998 (102) ELT 466], Curies [1999 (112) ELT 539]. In fact pune commissionerate trade notice 76/95 dated 20.7.1995 specifically prohibits issuance of cenvatable invoice in such cases as the trader is not receiving the goods. Off course, the intermediate trader can issue commercial invoice to the final buyer for payment/accounts purposes.

Receipt of goods is extremely important in Central Excise. Sale/purchase has been defined in Central Excise [Section 2(h) of the Central Excise Act] as transfer of possession of goods. In the present case the intermediate dealer is never receiving the goods, never getting the possession and hence in the eyes of Central Excise Law, not a buyer or seller of goods.

These points has been examined in one of my papers published in Excise Law Times, "Who is a first stage dealer" [2005 (186) ELT A55]. If possible, look into the paper, it may be helpful. 

Sir I think you left it blank