VAT Billing
This query is : Open
24 April 2009
I am registered in Karnataka.
I have a vendor in Delhi & have adviced him to supply directly to my customer in Delhi.
Will my vendor charge CST to me?
What should I charge to my customer CST or VAT?
I have a vendor in Delhi & have adviced him to supply directly to my customer in Delhi.
Will my vendor charge CST to me?
What should I charge to my customer CST or VAT?
24 April 2009
your vender charged VAT and you also further charged VAT and good not moved from delhi.
27 April 2009
No Vendor wont charge CST. And you need not charge further tax as the sale and purchase happend withing the state.
27 April 2009
Dear Vivek, kindly clarify whether or not the vendor is your CFA. If the vendor is one, & he is booking the sales, I see no reason for the charge of CST. VAT, however, will be invariably applicable as per the scheduled rate. You should charge VAT from your customer, & issue him a retail or a tax invoice, as the case may be.
28 April 2009
In order to charge CST, the sale must be in course of inter-state trade and the GOODS MUST MOVE FROM ONE STATE TO ANOTHER. Since, in the instant case, the goods are not moving out of Delhi, he cannot charge CST to you.
Further, as far as Karnataka is concerned, this is a "sale outside the state" and hence Kar. Govt. also has no jurisdiction to levy tax on the sale of goods by you to your customer since the goods are bought and sold in Delhi. If at all, you will have to pay the Delhi VAT. Depending upon the law prevailing there, you may have to pay tax in Delhi as a 'casual dealer'
Further, as far as Karnataka is concerned, this is a "sale outside the state" and hence Kar. Govt. also has no jurisdiction to levy tax on the sale of goods by you to your customer since the goods are bought and sold in Delhi. If at all, you will have to pay the Delhi VAT. Depending upon the law prevailing there, you may have to pay tax in Delhi as a 'casual dealer'
29 April 2009
In a situation like the one u explained, your vendor at ND should charge CST @ 2% against C Form on your customer at ND. and U need to issue C Form to ur vendor at ND and ur customer at ND shall issue E1 form aganist his purchase.
30 April 2009
Dear Vivek,
Your Sale is in transit sales as per CST act, in your case your vendor bill to you by applying CST @2 % but he send consignment directly to ur cust in delhi, for this he has to prepare LR accrdingly where he mention u as a buyer & ur custmor as a Consignee, then u bill to ur cust by applying 2% cst & collect C form from him, & give c from to ur vendor, & receive E1 from him.
One thing you must remember, u keep LR copy of Supply, because this is document on which sales tax office relie for authencity of trasit sales.
Your Sale is in transit sales as per CST act, in your case your vendor bill to you by applying CST @2 % but he send consignment directly to ur cust in delhi, for this he has to prepare LR accrdingly where he mention u as a buyer & ur custmor as a Consignee, then u bill to ur cust by applying 2% cst & collect C form from him, & give c from to ur vendor, & receive E1 from him.
One thing you must remember, u keep LR copy of Supply, because this is document on which sales tax office relie for authencity of trasit sales.
02 May 2009
Dear Vivek,
In your case, E1 ie., Sales in Transit theory not applicable. Basic requirement of E1 sales: One Interstate Transaction and three parties should involve. There is no interstate transaction, becasue the goods move only within New Delhi. a.sankaranarayana, Bangalore 9448144025
In your case, E1 ie., Sales in Transit theory not applicable. Basic requirement of E1 sales: One Interstate Transaction and three parties should involve. There is no interstate transaction, becasue the goods move only within New Delhi. a.sankaranarayana, Bangalore 9448144025
06 May 2009
Both Sales are VAT sales. Goods continue to be in Delhi and hence no question of CST sales.
17 May 2009
Its E-1 Transaction read the text below for better understanding of the transaction.
Invoice raised from One state to another state, but goods delivery with in same state which tax is applicable CST or VAT? Any forms applicable?
Invoice raised with in state but material delivery to another state which tax is applicable VAT or CST ?
CST is applicable On inter state sale & what is interstate sale is defined as under
Inter State Trade or Commerce In Sales Tax
A sale or purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase–
Occasions the movement of goods from one state to another.
Is effected by a transfer of documents of title to the goods during their movement from one state to another.(sales In transit)
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.
The Point is to be noted here that starts and end so if the start and end of movement of goods is interstate then CST will be apply but if start and end both in same state then vat will be applicable .suppose goods start movement from x state and moved through y state but movement of goods ends in x state then Vat will be applicable.
Goods moved from one state to another state for export/Import transaction and branch transfer are not covered under CST.
so location of the parties and billing is not important but movement of goods is important to decide whether CST is applicable or VAT is applicable.
Now point wise answer to your queries
As explained above if goods are moved with in the state then VAT will be applicable .No Form is required.the above situation can arise only if the seller has a branch office in the purchaser state.In this vat of the Purchaser’s state will be applicable.Seller can not charge their state Vat In this case.
As goods are to be moved from one state to other state so CST is applicable .No matter seller and purchaser belongs to same state.
Invoice raised from One state to another state, but goods delivery with in same state which tax is applicable CST or VAT? Any forms applicable?
Invoice raised with in state but material delivery to another state which tax is applicable VAT or CST ?
CST is applicable On inter state sale & what is interstate sale is defined as under
Inter State Trade or Commerce In Sales Tax
A sale or purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase–
Occasions the movement of goods from one state to another.
Is effected by a transfer of documents of title to the goods during their movement from one state to another.(sales In transit)
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.
The Point is to be noted here that starts and end so if the start and end of movement of goods is interstate then CST will be apply but if start and end both in same state then vat will be applicable .suppose goods start movement from x state and moved through y state but movement of goods ends in x state then Vat will be applicable.
Goods moved from one state to another state for export/Import transaction and branch transfer are not covered under CST.
so location of the parties and billing is not important but movement of goods is important to decide whether CST is applicable or VAT is applicable.
Now point wise answer to your queries
As explained above if goods are moved with in the state then VAT will be applicable .No Form is required.the above situation can arise only if the seller has a branch office in the purchaser state.In this vat of the Purchaser’s state will be applicable.Seller can not charge their state Vat In this case.
As goods are to be moved from one state to other state so CST is applicable .No matter seller and purchaser belongs to same state.
Message likes :
4 times
18 May 2009
u have to pay only VAT, no CST as in delhi it was in continuation of transfer
09 April 2012
I agree with Mr. Dayal. Gud Work.........
13 January 2014
Form E1 will come in picture, and VAT is to be charged.
06 April 2015
Dear Dayal, I am agree with you. I will be highly thankful to you if you could provide me a case law in this regard. I need it in an appeal similar to this case.
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