Local sale & e1,e2 sales

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 May 2013 I am a dealer registered under Delhi VAT and CST.

I have a sales person in Hyderabad who procures orders for me and I supply from Delhi.
Now I have an order in Hyd for which I want to procure from a Hyd vendor goods costing around 1 lakh. I want my vendor in Hyd to directly send the goods to my client in Hyd.

Since both my seller & buyer are in Hyd. E1, E2 sales are not possible.
As I don't have any office in Hyd, Can I make a local sale from Hyd from the residence of my sales person,without getting registered under Andhra VAT. The order is for around 1 lakh only.

Kindly guide.

rgds

harish

harish (Expert)
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27 May 2013 As you are not registered dealer in Andhra, therefore you cannot make sale at schedule or concessional rate from Andhra. In your case, seller in Andhra will make E1 sale to you & you make E2 sale to the ultimate buyer. Since the movement of good take place within state,hence,VAT is applicable.

If you sale from Andhra, highest VAT rate applicable to goods under question will be applicable & no credit is available to buyer.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2013 But even at the highest vat rate,can I sell without getting myself regd under Andhra vat...
Thanks for the guidance

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harish

harish (Expert)
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29 May 2013 Yes, you can sell as an unregistered dealer.

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2013 I do not have any office in Hyd.(Andhra)
No place has been added as place of business, neither in Delhi nor in Andhra

Can I still raise an invoice as an unregistered dealer from the residence of my sales person in Hyd.

Thanks for your guidance

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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03 August 2024 In the scenario described, you need to navigate the complexities of VAT and CST regulations to ensure compliance with local tax laws. Here’s a detailed overview:

### **Understanding Local Sales and E1/E2 Forms:**

- **Local Sales:** This refers to sales made within a state or local jurisdiction where both the seller and buyer are located. VAT or Sales Tax is applicable in this context, and it usually requires registration with the local tax authorities.

- **E1/E2 Forms:** These forms are used for inter-state sales where goods are transported from one state to another. E1 is used for sales from one registered dealer to another, and E2 is used for sales to a registered dealer under CST (Central Sales Tax). These forms do not apply to local sales.

### **Key Points for Your Situation:**

1. **Local Sales Registration Requirement:**
- Since your vendor and buyer are both located in Hyderabad (Andhra Pradesh), and the sale is executed within the state, it is considered a local sale.
- Even though you are registered in Delhi, you are engaging in a local sale in Andhra Pradesh. Generally, local sales require registration with the local VAT authorities of the state where the sale is made.

2. **VAT Registration in Andhra Pradesh:**
- **Requirement:** If you are making sales in Andhra Pradesh, even from a location where you do not have a physical office, you are generally required to register under Andhra Pradesh VAT if your sales exceed the threshold limit specified by Andhra Pradesh VAT laws.
- **Threshold Limit:** Each state has a threshold limit for VAT registration. For Andhra Pradesh, you need to check the current limit which might require registration if your turnover exceeds a specific amount.

3. **Sales Invoice and VAT Compliance:**
- **Invoice Issuance:** You must issue a VAT invoice for local sales, and it should include details such as VAT registration number, the rate of VAT applied, and other requisite information.
- **VAT Collection and Payment:** You are required to collect VAT on the sale and remit it to the Andhra Pradesh VAT authorities. This requires you to be registered under Andhra Pradesh VAT.

4. **Selling Without Registration:**
- Selling goods in Andhra Pradesh without being registered with Andhra Pradesh VAT authorities is generally not permitted. Even if you are using the residence of your salesperson, the transaction qualifies as a local sale and requires adherence to local VAT regulations.

### **Steps to Comply:**

1. **Register for VAT in Andhra Pradesh:**
- Obtain VAT registration in Andhra Pradesh if your local sales exceed the threshold limit or if required by local laws.

2. **Issue Proper VAT Invoices:**
- Ensure that VAT invoices are issued in accordance with Andhra Pradesh VAT requirements, including your VAT registration number.

3. **Maintain Records:**
- Keep detailed records of all transactions, including local sales and VAT collected, to comply with audit requirements and for accurate tax reporting.

4. **Consult Local Tax Experts:**
- It’s advisable to consult with local tax professionals or legal advisors in Andhra Pradesh to understand specific requirements and ensure compliance with local VAT regulations.

### **Summary:**

In your case, since the sale is happening within Andhra Pradesh and involves a Hyderabad-based vendor and client, you will need to be registered under Andhra Pradesh VAT to comply with local tax laws. Selling from a location in Andhra Pradesh without proper registration and issuing VAT invoices could lead to non-compliance issues.

Make sure to take the necessary steps to register and comply with local VAT regulations in Andhra Pradesh to avoid any legal issues and ensure smooth business operations.