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SALES TAX

SANJAY SINGHAL (Director) (30 Points)

11 April 2009

Sir, We want to buy yarn from A and sell it to C who exports this yarn. In other words, we are the middle link B in the chain of flow. Kindly advise if we (B) can save the VAT/CST involved through available ways without disclosing the identity of C to A.

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3 Replies

Jitender (Chartered Accountant) (8724 Points)
Replied 11 April 2009

this sale to u is exempt from cst as this is penultimate sale(sale for export). issue for E1/E2

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SANJAY SINGHAL (Director) (30 Points)
Replied 11 April 2009

Thanks for the reply.

But the CST is actually charged by A from B at the first stage. Pls explain if this addition to cost can also be saved with the help of H form since the goods are finally being exported by the last buyer C.

R B Banwat (tax consultant) (154 Points)
Replied 11 April 2009

Originally posted by :SANJAY SINGHAL
"	Sir, We want to buy yarn from A and sell it to C who exports this yarn. In other words, we are the middle link B in the chain of flow. Kindly advise if we (B) can save the VAT/CST involved through available ways without disclosing the identity of C to A.	"

Dear Shri Agarwal

1. The State in which all the three ( A/B/C) is one and same, there can be following way it will happen. Please remember here E/I Eii will not come in picture

i. A will sale you the goods by charging apporpriate rate of VAT of the state.

2. B i.e. You will sales the goods on your own invoice to C against Form H, where u will not charge any tax.

3. You are entitled to claim setoff of VAT Input tax charged to you ny your supplier in full and also can be adjusted against other VAT payments

B : If B and C are in one state tand A is in another State, then you will be able to purchase Goods against C form and sale it to A against H form, here you will losse 2% CST

If u have any doubts, please psot it here

R B banwat