Sale in transit

654 views 2 replies

Hello,

Please advise which of these is allowed and which forms are to be issued in each of the cases, if they are permissible -

Case 1:
=======
A company has 2 branches A and B in StateA and StateB respectively. Supplier C is in StateC.

A purchases goods from C and effects 'sale in transit' to B.


Case 2:
======

A company has 2 branches A and B in StateA and StateB respectively. Supplier C is in StateB.

A purchases goods from C (in StateB) and effects 'sale in transit' to B.


Reasons to do this -

1. Goods actually travel from C to A through StateB
2. Turnover needs to be booked by A and the main market is in StateB
3. C is a manufacturer / dealer registered excise dealer and passing MODVAT credit. Also, B is a registered excise dealer. All A, B & C have a valid TIN / CST number.

Thanks.

Replies (2)

Dear Mr. Sunil... Form C only effect where goods delivered actually.

As per my understanding about your query.

1. Seller "C" sell goods to "A" but delivered to "B" . in this case "B" have to issue form C to seller.

in second case

2. Seller "C" sell goods to "A" but delivered to "B" which is in same state, in this regard no form will be applicable because on the bill VAT should applicable not CST.

Case 1

 As I understood, A and B are the branches of a same Company, so that A can't sell to B in transit. A can make stock Transfer to B under Form F Condition. A Should issue C  Form to C and B Should issue Form F to A.

if A and B are not a branches of same company and different entity, A Should issue C Form to C and 
C should issue E1 Form to A. B should issue C Form to A  also.

CASE 2

Case 2 is not an interstate Sales becuase the stock not physically moving from one state to another, he should charge VAT.

 

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