Hey guys,

I Hope you all must have gone through the first part of " VAT/ CST - Basic concept. Now its time to write on Part 2.

So i think now you all must be knowing the basics of above, now its time to move ahead.

Section 3 -  Inter state sales -

A sale or purchase shale be deemed to be in the course of inter state trade or commerce if such sale or purchase ;

- if such sale or purchase occassions the movement of goods from one state to another ( 3 (a) )

- is affected by transfer of document to title to goods during the course of movement of the goods.

In Transit Sales -  ( Exempt from tax )

When the sale is affected by transfer of document of title to goods during the movement from one state to another, it is known as " In Transit Sales ".

Key Conditions -

1. All parties involved should be registerd parties under CST Act.

2. The sale is second or subsequent CST sale during inter state movement of goods pursuance to the first sale.

3.  Submission of declaration form ( Declaration in form C and certificate in form E-1 and E-2 ).

Section 4 - Sale outside the state and inside the state -

A Sale shall be deemed to take place inside a state -

- In case of uncertained goods , the state where  the goods are located at the time of contract.

- In case of uncertained goods, the state where the goods are appropriated to the contract by the seller or the buyer. 

 Local vs inter state sales -

- Goods are sold by ABC Co. located in Rohini to XYZ IN U.P - This will be a Inter stae sale in Delhi.

- Goods are sold by ABC Co. In Raj gdn ( Delhi ) to C.P ( Delhi ) - This will be a local sale.

- Company X and Y are located in T.N. They enter into a contract whereby Company X agrees to sell a product to Compoany Y. Company X in order to meet the contract places an order on company Z located in Delhi with instruction that goods be directly send to company Y. - Both the sale will be inter stae sales.

I Hope you will all appreciate my effort.

Next Part will be posted soon.

Best Regards

Sanyam Arora