rajkumar babutta (PROP) 04 October 2012

Sale in transit

Dear Sir

Company “A”(Govt Organisation ) gives order to Company “B” in the state of haryana with clear instruction to supply the material in sale in Transit basis. Company “B” registered with HVAT orders for material to company “C” in Rajasthan and have issued Road Permits of there own. The materials are supplied by Company “C” on issuance of C form and road permits from company “B” . The company “B” has taken E1 from Comapny “C” and on production of the same to Employer as company “A” requisite form C was issued to Company “B”. The material as supplied by company “C” were delivered by company “B” to company “A”

Kindly advvice whether the sale as made should be considered as Sale in Transit oor no

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2 Replies

M.V.GIRI (ADVOCATE & TAX CONSULTANT) 07 October 2012

If "B" company taken delivery of goods and supplied to "A" company, It is not sale in transit. If B co has not taken delivery and the goods are directly delivered to A co, it is sale in transig

V.Devananda Narasimham (Advocate) 18 November 2012

According to Sec.6(2) of the CST Act, sale in transit means where a sale of any goods in the course of interstate trade has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effected by a transfer of documents of title to such goods to a registered dealer,shall be exempt from tax under the CST Act. Here transfer of title during the course of movement without takeing delivery constitutes E1 sales or sale in transit.