viji (CTO) (33 Points)
14 November 2014Mr. A has a TIN in Kerala. He got an order to supply some goods from another dealer Mr.B who is also a Registered dealer in Kerala. Then Mr. A gave a purchase order to Mr. C who is from another state and Mr.A directed Mr.C to supply the ordered goods to Mr.B. Is it a sale in transit as mentioned under 6(2) of the CST Act or a sale that should be taxable under VAT in Kerala after allowing CST purchase to Mr.A.
Harshal Fifadra
(Chartered Accountant)
(1489 Points)
Replied 15 November 2014
If the CST purchase took place first and subsequently there is a local sale in kerala then it is not a sales-in-transit.
Sale-in-transit is a sale which is not taxable under CST Act,1956. It is a sale in which the goods are sold by one party to another party while the goods are still in transit.
In the current case, it would be a 6(2) sale when:
1.A orders C to deliver the goods directly to B
2.A endorses the transportation details in name of B while the goods are still in transit.
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