who will pay entry tax in E 1 sale ( sale in transit ) buyer
or consignee ?
Answer Posted / 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
Is This Answer Correct ? | 0 Yes | 1 No |
Post New Answer View All Answers
What is CAARO?
Our Company dedduct TDS on the collection charge and claim (rate diff claim, scheme claim, collection charge means , if any party take material directly form our store our company give them frieght charge and deduct tds@10.30%). my question in what category of this type of TDS decution ? is it payment to contractor or what ?
Hellow this is ravindra wanted to know about excise duty rates pls suggest
How to working service tax in excel sheet?
What is income tax? How is it calculated?
Who is to paid income tax and what is the procedure of filling income tax return?
why is service tax set off is consider while calculating wct tds
is it necessary to use form38 in UP for purchase of goods from outside UP @5%CST Tax
how to calculate deffered tax, relating to company.. pls explain with examples.. also about timing differences..
What is the commitment to the bankers against L/C ? They need any colletral Security or any deposit ? What is terms & conditions of L/c?
What is the maximum amount to issue Form C to a dealer for the purchase of 40 crores in several bills in a quater?
Sir, in CEntral excise we need to pay some amt with interest ex.13815 amt for 66 days how to calcualte this?
What is RITC under UP VAT. and How it is calculated.
What is the procedures for withdrawing of form C?
IF WE ARE WORKING IN PHARMA COMPANY & I SEND THE MEDICINE SAMPLE TO THE SALSMAN IN VARIOUS PLASE OF INDIA THAT TIME MADE INVOICE OR ANY OTHER CHALLN OR RECIEPT WHAT AS PER LAW ANY TAX APPLIED IN THE INVOICE & WHICH FORM WILL BE REQUIRED HOW TO GET IT, PLEASE GIVE ME DETAIL ALL INFORMATION WITH EXAMPLE & WHAT ENTEY OF THIS TRANSATION IN BOOKS OF ACCOUNT