what is e-1 sales



what is e-1 sales..

Answer / abhivirthi tax and industrial

E-I sales were covered by E-1 Form under the Central Sales Tax Act, 1956. 

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" i.e. E-I sales.

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 breaksForm 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

Is This Answer Correct ?    0 Yes 0 No

Post New Answer

More Taxation Interview Questions

HOW TO FILE RETURN- SALARIED PERSON GETTING SALARY 6 MONTH FROM ONE & 6 MONTH ANOTHER COMPANY

0 Answers   First National Bank,


SELLER A : has a w/house in chennai and bangalore both and the BUYER B is based in chennai. SELLER A carries stock in both the locations. Can BUYER B buy who is based in Chennai request purchase from Bangalore through C-form .. and if so will there be any obligation on the Seller A

0 Answers   IR,


How to calculate service tax in construction catatory

10 Answers  


tds can be applicable on haltage(late time unloading )

2 Answers  


What Is The Chart Rate For Deduction Of TDS On Salary

3 Answers   ADS, Petrochemicals, Real Estate,






I'm a Taiwaness, and my boss have investment in india. I have a question about TDS. If I rent a one day car that doesn't sign any contract or agreement, should I pay the TDS or should I dedcut TDS from payment of this expenditure.

2 Answers  


At what rate firms are required to pay tax on their income?

0 Answers  


pls define central sales tax , how will show in invoice a cst rate on interstate sales with-out c -form and against c form . clear it

3 Answers  


What is the diff between Comercial tax and sales tax?

2 Answers   Idea,


what is fringe benefit tax

2 Answers  


How to perform TDS on service bill in which service tax & central sales tax both are applicable?

3 Answers  


what is "c" form?

2 Answers  


Categories