We are Private Limited Co. having its registered in Mumbai (registered under CST & VAT do not have any manufacturing activity) got an order from Delhi party for supply of Incinerator material and Furnace Vessel to be supplied in Punjab to the end user. (The Co. which has issued P.O. to us is not end user)

Purchase Order terms are PO Value + all taxes and duties within India shall be to the buyer’s account (i.e. reimbursable).

We got the Vessel manufactured from Gujarat and sold (Sale in Transit). The seller has billed us Assessable value + ED + CST + Transportation.

The Incinerator material was procured from the party in Delhi (who had purchased the same from the manufacturer In south) and directly supplied to Punjab. This was also sale in transit to us and to end-user.

Our Purchase orders on both the above supplies were PO Value + all taxes and duties reimbursable. For incinerator material since the transaction was sale in Transit the party raised Debit Note for ED & CST on us; based on the actual invoices of manufacturer.

For both the supplies the end user got the ED & CST Invoices (for availing Cenvat).

Now as per P.O. we have raised our commercial invoices and Debit Note for the reimbursement of ED & CST (for sale in transit invoices as well as for manufacturer’s invoice i.e. Vessel)

We shall be grateful if you could educate us on whether we are right in raising the Debit Note for reimbursement of ED & CST against our supplier’s invoices (as we have already received Debit Notes from the supplier of Incinerator material).

what will be the status under VAT for party getting reimbursement and  treatment of the same in accounting books

Supplier’s invoice – Bill to party is D, consignee is Y ( sales within the state, VAT applicable).
The material reaches directly to Y and we make the payment to X as per the invoice raised on us.

Please how can we create a commercial invoice from delhi on Y ( adding our margin also ). what will be the contents of our commercial invoice ( we paid VAT, how to go ahead in this case). 

Thanks
Anurag

we are based at Mumbai having our manufacturing contracters at Chennai,Pondicherry.
if we buy raw materials at Banglore under sale in transit and directly send it
our above Chennai or Pondicerry factory under sale in transit please let me know whether we will cover under section 6(2) for availaing exemption. Please let me have your reply urgently. Please let me have your explanation for the following judgement urgently.

thanks

Judgement Last Updated on: 11 Dec 2008 LexDoc Id: 352238
Category – SC Cases, Sales Tax, Indirect Tax
Issuing Authority/Forum: SC
A and G Projects and Technologies Ltd. vs State of Karnataka
Citation (2009) 19 VST 239
LexReported

Buyer has ordered turnkey project to us. We inturn ordered equipments to various supppliers. Now buyer is in Andhra Pradesh. ( Online way bills required for movement of goods ) if transaction is done on sale in transit i.e. supply of equipments directly to end user by endorsing LR by us & dealer in what name we should request end user to issue way bills. Please help whether it will be OEM, Dealer or us )

We need a relevant case for the below mentioned transaction :

Company A sells (commodity X) to company B
Company B sells (commodity X) to Company C
Company C sells (commodity X) to Company A again

In the given transaction following are critical observations of sales tax department :

a) no physical movements of goods
b) No transport challan are prepared
c) No delivery instructions issued

However the transactions are being done through registered dealers only through cheque.

Under the given circumstances can the sales tax department imply that the above transactions is “ILLEGAL”?

If you have any relevant case laws kindly do let us know and I am ready to make requisite service charges, as applicable!

Regards,

Milan Parkeria

Even though the Order is placed on TN, The materials is supplied from A.P to your place in AP.
As this is an intra-state transactions, local VAT will be applicable as per A.P. VAT schedule.

regards

We are also based @ HYD , and has got the same issue,, if you have found the solution , please share.

Thanks

Sandeep

Location of is irrelevant.Since your factory located at UP and same is registered under CST Act 1956 with UP Govt. , you can transfer the goods to customer in Gujarat Sate. Such Sale is permitted against form “C” for concessional rate of 2%.

With Regards,

Nishad

We want to sell the product to the our Gujarat Customer based on Sales in Transist. The naterial directly despatch from sahibaadbad to customer who based at gujarat. Can we do this transaction uder C form, Please advice with Law.

Order placed by (A) situated in Andhra Pradesh on (B) located at Tamil Nadu.
Now, (A) wants the delivery to be made to (C) who is located at other state and do not have the CST Registration wherein (A) is having registration. (A) and (C) are same Organization.

This Inter state transaction is with FULL RATE of TAX and not on concessional say form “C” or so.

Whether this transaction is legally permissible?.

(B) indicates that it is not possible.

Thanks and regards,

if want purchase iron in andhrapradesh and sell it in andhra pradesh, does my turnover will be added in VAT rules. if this turnover should be added what is the other way of sale legally.

01.Can we transfer theses goods and what are the document required so that we dont face any difficulties from tax authorities in way trasit to chennai/cochin
02.Any form what so ever involve in this transaction.

Purchase Order terms are PO Value + all taxes and duties within India shall be to the buyer’s account (i.e. reimbursable).

We got the Vessel manufactured from Gujarat and sold (Sale in Transit). The seller has billed us Assessable value + ED + CST + Transportation.

The Incinerator material was procured from the party in Delhi (who had purchased the same from the manufacturer In south) and directly supplied to Punjab. This was also sale in transit to us and to end-user.

Our Purchase orders on both the above supplies were PO Value + all taxes and duties reimbursable. For incinerator material since the transaction was sale in Transit the party raised Debit Note for ED & CST on us; based on the actual invoices of manufacturer.

For both the supplies the end user got the ED & CST Invoices (for availing Cenvat).

Now as per P.O. we have raised our commercial invoices and Debit Note for the reimbursement of ED & CST (for sale in transit invoices as well as for manufacturer’s invoice i.e. Vessel)

We shall be grateful if you could educate us on whether we are right in raising the Debit Note for reimbursement of ED & CST against our supplier’s invoices (as we have already received Debit Notes from the supplier of Incinerator material).

1. “A” has purchased the goods, against form C, from another state.
2. “A” has asked the supplier to get 15 L.R. of various quantities.
3. The material is kept at transporters godown.
4. “A” can sell the goods, against sale in transit, by endorsing the l.r.
5. Material is sold within two months from the date of receipt at transporters godown, to same customers on various days. They may have paid the demurrage charges to the transporter.
6. “A” obtains the form C from all the customers.
7. Sale tax authority says, the same is not allowed, because the customers are same, who have bought the material on various days, and two months is longer period. So they have disallowed the transaction?
Is this correct?

If “A” is the manufacturer “B” is the agent/buyer for “A” & “C” is the ultimate buyer. Assuming that “A” is in New Delhi & B&C are in Himachal Pradesh.

Incase “A” raise bill on 23.05.10 to “B” mentioning “C” as ultimate buyer. Goods reach in HP on 20.06.10, What is the correct date of invoice to be raised by “B”? “B” will raise the bill after materials received by “C” or before that?

Thanx,

Naba Kumar Mishra

We are dealer of Chemicals (Say- VC) having Mahahrashtra ST regn and Non localise dealer registered with Guj ST with Mumbai address.

We purchase goods from Mumbai and from Kandla.
also having excise regn and pass modvate

Q.1 purchase from Mumbai deler (say-A) and A raise bill to VC (Guj NLD) charging 2% CST and VC sale to gujarat customer (say-C) , modvate directly A to C , So can VC sale goods on sale in transit and how LR to be prapared? and which form to exchanged?

Q.2 VC (Mumbai) purchase goods from Kandla Gujarat A and
A charge 2% CST to VC and VC sales goods to Pune customer, can he sale it on slae in transit transaction and how R to b preapared?

Q.3 VC (Guj NLD) purchase good from Mumbai dealer (A) and goods move from Mumbai to Hyderabad customer (C) A praper bill to VC (Guj NLD ) charging 2% CST and pass modvate to C , can VC sale on sale in transit basis and how LT ro be prepared?

which forms must be collected from each party?

whether vat is chargeable by rajkot party in his bill?
if answer to above is yes:

input credit of tax invoice raised by rajkot dealer is available to ahmedabad party?

at which amount rajkot party will raise the invoice?

Our firm situated at Karanataka and some times we have been procurring material from neighbour states like Maharashtra, AP, UP, Gujarat etc. So pl confirm whenever material dispatched by supplier from other states, is it necessary to provide VAT from (VAT Form 515)from our end. Can any one guide in this regard.

Do we mention Sale in Transit against Form E1 u/s 6(2) –

Can someone guide me on the invoicing

Movement from one state to another: In above case when goods are given to carrier or transporter for transportation .the movement of goods starts at the time of delivery to carrier and terminated at the time when delivery is taken back from such transporter /carrier
As per point two above CST is applicable if sale is done while goods movement from one state to another state.Its called E-1 transaction or sale in transit.
suppose: X situated in Delhi purchased goods from Y in Punjab .Y booked the material on transport and send GR/RR(goods receipt note issued by transporter) to X. X instead of receiving material from transport himself sold the material to Z in Delhi (same state) by endorsing RR/GR
in the name of Z.Z takes the delivery from the transporter .
In this case sale from Y to X is covered under CST and X to Z is also covered Under CST as sale in transit.
To complete the transaction X will issue C form to Y ,
Y will issue E-1 form to X
Z will issue C form to X
In the above case even X & Z both are situated in Delhi but the sale transaction is covered under “sale in transit” clause of CST act so CST will be applicable and vat is not be charged.
CST is applicable only if goods movement is from one state to other state .If goods movement is started from one state and ends in same state then CST will not be applicable.

02) if material (Exciable) buy from gujarat, want to sale in put of gujarat, please do let us know how do we bill to patry?, what tax charged manufacturer in his invoice? and how do we prepare our commercial invoice and how much tax we make in invoice

regards,
Bhavin

Dealer “X” places order for one of the components on delar “Y” for Rs.10000.00 and asks him endorse LR in favour of dealer “A” under E-1 Form.

Dealer “X” railes commerical bill on Dealer on “A” as under:

Basic Price 12500.00
CST reimbursement; 200.00
Total: 12700.00

In this case Dealer “X” has collected a margin of Rs.2500.00 over the basic of his supplier Dealer “Y”. Dealer “X” is also collecting CST paid to Dealer “Y” by was of reimbursement.
Is this course available to Dealer “X”. Becasue the turnover is exempt in the hands of X. Then he can charge tax by any mode. Would this not amount to undue enrichment.
Please elaborate.
Regards,

Kadival.

Thank you,

Regards,

Arul K