Consignment sales - conversion of goods

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Prakash (Querist)
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03 November 2011 Dear Sir/Madam
Please clarify my doubt.
We send goods to our consingment agent at other state on consingment sale basis. The goods are vatable at both states. After receiving the goods the agent converts/makes some changes and sells the converted goods as exempted(the converted goods are exempted at both states). In this case we are not sending goods as per final requirement of the end user. my doubt is - whether the conversion of the principle goods is allowed under consingmet sale/ branch transfer

U S Sharma

U S Sharma (Expert)
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03 November 2011 agent would be deemed manufacturer, and your sales would be treated as central sales from you to agent. thereafter agent would sell it as tax free or taxable at his convenience.

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