kishorkumar d adhia (Accountant) 18 September 2010

SALES TAX QUARRY

I WANT FOLLOWING ANSWERS

1 I HAVE STARTED MY BUSINESS IN MUMBAI AND TAKEN LOAN FROM BANK AND HENCE I HAVE TO DO BUSINESS IN MUMBAI ONLY.

2 I HAVE CUSTOMERS IN RAJASTHAN ONLY.

3 I BUY GOODS FROM MUMBAI SEND DIRECTLY TO RAJASTHAN CUSTOMERS. I DON'T TAKE DELIVERY IN MUMBAI.

4 COULD ANY ONLY GUIDE ME WHETHER I AM SUPPOSED TO TAKE RAJASTHAN'S VAT NO AND CREAT BRANCH OVER THERE AND SHOW BRANCH TRANSFER OR I CAN SELL THE GOODS DIRECTLY TO MY CUSTOMER WITHOUT LOSSING LOCAL TAX BECAUSE IF I SEND MY BILL FROM HERE I AM SUPPOSED TO CHARGE CST AND IF I SEND THROUH BRANCH I THINK I DONT HAVE TO CHARGES CST. AND THEN WHEN I SELL THROUH BRANCH I HAVE TO CHARGE RAJASTHAN LOCAL TAX. I AM CONFUSED PLEASE GUIDE ME.

THANKS KISHOR

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4 Replies

M.V.GIRI (ADVOCATE & TAX CONSULTANT) 18 September 2010

You can send directly from Mumbai and charge CST @2% against 'C' forms. You will get input tax credit for the purchases made at Mumbai. If you have Rajastan branch and Rajastan TIN then you will not get any input and you have to pay Rajastan local tax for your sale.So you can purchase at Mumbai and get input tax credit and pay 2% tax under the CST Act.

kishorkumar d adhia (Accountant) 19 September 2010

THANKS MR GIRI

BUT I WANT TO KNOW IF I OPEN A BRANCH AT RAJASTHAN THEN CAN I SAVE CST 2% BECAUSE I TRANFER THE GOODS TO BRANCH ONLY ?

Avikshit Singh (Executive) 23 September 2010

My vendor who has a factory in Gaziabad, UP has demanded form 38 (Road Permit). The vendor says that his registered office is in New Delhi. hence he requires form 38 to send material. My question is that: Since his factory is in UP and it appears that he has registered in new delhi to evade tax (UP VAT, he is L1 just because he is charging CST @ 2% with c form). Is there a law against such practice and will I be liable if there is (If I give him purchase order and form 38)

Dillip Kumar Panigrahi (Service) 03 October 2010

Depends upou the provisions of the State VAT Act. In some States as in Orissa in case of branch transfer there is a separate provision for adjustment of ITC when branch transfer is made. It may be there in the State of Maharashtra also. Under the existing provisions of CST Act if you are not taking delivery in Mumbay, you can effect Transit sale exempted u/s 6(2) of CST Act.