In transit sales - leviability of CST

ABC Ltd. (Rajasthan) sold goods to XYZ Ltd. (Delhi) and levied a CST U/S 3(a) of CST Act, 1956.

XYZ Ltd. (Delhi) sold same goods without any value add, to PQR Ltd. (West Bengal). The sale price (including CST) of the goods are same as that charged by ABC Ltd.

Now, the question is whether XYZ Ltd. is required to pay additional CST and pass on the same to PQR Ltd.?    

Replies (3)

if sale was made by endorsement of L/R during transit of goods,and if it was not pre-planed sale (Not received Po before purchase date) then it will be sale agaisnt E-1 form & therefor not require to pay any additional CST. 

Thanks Vikash,

However, the agreement between PQR and XYZ has already been entered into for the supply of various products and this product is a part of total value of agreement, on which XYZ is not earning anything. In short, for this particular product, XYZ is working in the capacity of a trader but without margin.

margin does not matter for indirect tax purpose. if u treat it as E-1 sale in the presence of contract, that  will be wrong. 2% normal cst will be charged on sale from XYZ Ltd.

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