Answer / abhivirthi tax and industrial

An inter-State sale or inter-State purchase which is effected
by transfer of document of title to the goods during their
movement from one State to Another is called sale in transit.

In the course of inter-State trade or commerce goods may
move from State to State. To save handling charges, the
traders may resort to sale by transfer of documents of title
during the course of inter-State movement of goods as laid
down in Section 3(b). They may save handling charges, but
they have to pay tax every time a sale is made which will
result in price hike and in order to prevent price hike Section
6(2) has been designed to prevent cascading effect.

An inter-State sale or inter-State purchase which is effected
by transfer of document of title to the goods during their
movement from one State to Another is called "Sale in
Transit".

In simple:

The dealer who effects first interstate sale under Section 3(a)
must issue Form E I to the buyer and charge Central Sales Tax
at concessional rate and get C Form. (First seller has to issue
E I Form to the buyer and obtain C form from the buyer)

In case where the registered dealer purchases goods from
one registered inter-state dealer and sells the same while in
transit, to another registered inter-state dealer, the sales will
be exempted from CST on submission of “Form E-II” to the
Department.

The dealers who effects subsequent sales must issue Form E
II to the subsequent buyers and also issue Form C to the
sellers from whom the goods were purchased under Section
3(b) and the subsequent seller gets CST exemption. (Second
and subsequent sellers has to issue E II Form). The
subsequent sellers should not handle the goods physically and
if the goods were handled physically subsequent transfer will
not be made. (Subsequent seller has to issue E II Form to the
buyer and obtain C form from the subsequent buyer)

When the goods were taken delivery or physically handled the
movement of goods comes to an end and such dealer or
person will be treated as final buyer and hence the final buyer
must issue C form to the last seller to him as the transit chain
breaks and the cost of the goods will be the Cost of the goods
+ Central Sales Tax (Concessional rate).

Form E-II is used for claiming the exemption from payment of
CST.

Reply from:

ABHIVIRTHI Tax and Industrial Consultancy
R.R.JAGADEESAN
VAT Practitioner and Industrial Consultant
H-63, Palaami Enclave
New Natham Road
Madurai-625014
Cell: 9994990599

what is the tds rs for commision , and other

1 Answers  

---

While issue of C form to the seller, c form can be issued on either before @ 2% CST or after @ 2% cst. If so, what is the logic.

5 Answers  

---

If we got a printing jon we are adverstising firm for that we purchase paper from local dealer which contain vat 4% now when i bill to the person from whom i got a priniting job what should i consider this as service or sale and what tax i charge, i don't have vat no. but i have service tax no.?

0 Answers   iNova,

---

is it necessary to make payment to party in the same assessment year after deducting tds

2 Answers  

---

When VAT 14.5% is applicable and when Work contract tax 4% is applicable? Is both are same?

2 Answers  

---

how many types of sale tax returns?

2 Answers  

---

What Is Difference of Cst Waybill Advance cst Waybill

1 Answers  

---

what is input rebet on sale tax?

2 Answers   Infosys,

---

what is luxury tax?

7 Answers  

---

While depositing cash at any bank above then Rs 50K, we need to provide PAN Card or we have to fill form 60, but tell me why a person needs to sign FORM 60 if he is paying installments of >50K of Loan availed by him/her earlier? As if he is repaying Loan, not depositing in his A/c?

0 Answers   Banking,

---

How we will learn Sales Tax, VAT quickly?

3 Answers  

---

WHERE WE HAVE TO TAKE TDS RECEIVABLES IN THE BALANCE SHEET OR P&L A/C ?

12 Answers   Insurance, Reliance, Wings Customer Care,

---