Applicability of tax on purchases from a dealer

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 June 2011 We have placed an order to M/s.Auma Enterprises who is the manufacturer of actuator spres. In his quotation he has quoted ED@10.3% and CST@2%against C form.he has requested to prepare the Purchase order on his dealer's name M/s.Techmech India. Now Techmech india has submitted a proforma invoice by quoting vat 14.5% extra instead of CST@2%.Now my question is what is the applicable CST/VST rate in this case.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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23 June 2011 Mr Author,
Now it depends on where the dealer of the manufacturer is situated. The manufacturer may be out side state and therefore he quotes sales @2% cst aginst 'C' forms.He might have appointed a local distributor,who is in your own state, and so,he quotes local tax rates. In order to solve this problem you ask M/s Techmech India to do the sale in transit i.e.'E1' sale,in which case you can save the tax(2% on purchases)only.