Sales tax forms

Querist : Anonymous (Querist) 15 September 2011 This query is : Resolved
This is vivek from mathura. I want to purchase the goods from punjab & send that directly to Rajasthan (without recieving in mathura). what is the procedure for Taxation & CST forms?

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Raj Kumar Makkad (Expert) 15 September 2011
visit www.ttaxguru.com site meant for raising such commercial queries.

M/s. Y-not legal services (Expert) 16 September 2011
Dear makkad sir.. The author not asked any provision of law. Its his practical problem. Your simple guidence may be better than visit that website. Am expecting something from you sir.

R.Ramachandran (Expert) 16 September 2011
Dear Mr. Vivek,

You can order for the goods on a punjab dealer and direct him to deliver the goods directly to a party in Rajasthan. If you furnish Form "C" to the Punjab Dealer, he will charge you concessional rate of CST.
Thereafter you can raise commercial invoice on the party at Rajasthan to realise your amount.

You have to take care of certain things.

When you enter into such purchases, you have to have your name as "Consignee" with Rajasthan Address. Then while the goods are in transit (i.e. before you take delivery of the goods in Rajasthan), you can endorse the documents in favour of the Rajasthan buyer. Thus, there will be two inter-State sales (i) from Punjab Dealer to you and (ii) from you to the Rajasthan party.
While you will be giving Form "C" to Punjab Dealer; you have to obtain Form "C" from Rajasthan party and Form "E-I" from Punjab Dealer.
The subsequent sale done by you while the goods are in transit is exempted from payment of CST vide Section 6(2) of the CST Act.

You have to be aware of certain things.
Now a days, if the consignee's name (Rajasthan buyer's name) is directly given in the transport documents, it creates problems since in that case, the first sale by Punjab Dealer to you is treated as local sale (where full VAT rate will be applicable) and then the subsequent sale to Rajasthan party is treated as a CST sale by you where you have to obtain C Form from the Rajasthan Party. The decision of the Supreme Court in the Case of P&G Projects and another unreported judgment from Supreme Court create such problems.
So you have to take care of such issues.

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