One of my client in Delhi, purchase goods from his suppliers `A' in U.P., during the course of sale he sold the same to his customer `B' in U.P. through transfer of documents. No goods move from one state to another. What is the tax implication and Which statutory form will be received from customer and which form will be issued to suppliers.
28 January 2010
this sale can be called stock transfer for this A has to issue form F agnst this sale & VAT will be applicable as per local sales tax rate
29 January 2010
Thanks, but neither my client not his customer is the agent of `A' How can `A' issue Form F. Further what will the implication in my client books. whether it is central sale if yes will he received Form `C' or not. Please.
29 January 2010
As per the judgement of Honourable Madras highcourt in the case of East India Corporation vs State of TN(1975)36 stc 370 (Mad) and Dy CCT vs Sarathi Agencies (1990) 78 STC 126 (Mad), It is an interstate sale. Form E-1 and C are relevant in the tranaction.
29 January 2010
Thanks Mr. Gupta, `A' the supplier issued bill after charging VAT. Will he be issued `E1' form and whether I will issued them `C' form ?
there is something wrong with ur query or may be with ur vendor becoz Tax is subject to charge on customer,s location.if A is invoicing ur client who is located in delhi , how can he charged VAT .if A has directly billed B than it means ur client has no role.ur client will get some sort of commision for sale & in ur clients book it will be considered as commission received.in spite of this ,If u have any doubt pls explain ur query in glance of all ur client,A & B .what is his role in this sale
29 January 2010
Mr. Bishwajaeet, My client is in Delhi, he purchase goods from `A' in U.P., before goods reach to Delhi or can say before it dispatch my client sold it to `B' also in U.P. through transfer of documents. Hence `A' bill to my client and my client bill to `B' but goods delivered from `A' to `B' directly. Pl. tell me the tax implication and also the involvement of statutory forms.
29 January 2010
This is called Sale in transit under sec-6(2) of CST ACT & CST is applicable. ur client has to issue C form for getting CST 2% benefit & vendor has to issue E-1 form agnst ur C form & back side of LR should be endorsed by ur client.but if ur client has a branch office within U.P. than A has to bill ur client with VAT but adress of ur client should be within U.P.only ,however Sale in transit cannot be done.it is like a normal sale but A has to deliver goods to B as per Purchase order issued by ur Client .
Thanks for your reply, I understand the Ist half. Please explain 2nd half again. If my client has not any branch in U.P. My client in Delhi he sold the goods by document transfer to `B' in U.P. the Vendor `A' also in U.P., whether `A' charge VAT on their sale invoice ? What will my client charge on his sale bill issued to `B' CST or not? whether we will receive `C' Form from `B' ? Please explain.
30 January 2010
Your client will issue C form to A in UP and A in UP will issue E-1 form to your client. B in UP will issue C form to your client. In case of any further clarification needed to any one, pl. call on 09868826026
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