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Answer Posted / abhivirthi tax and industrial
Sale means any transfer of property in goods by one person to another for cash or deferred payment or for any other valuable consideration. One person cannot make a sale to himself and hence there must two persons for the purpose of sale and then only one person can make sale to another person. The selling person must give goods and receive payment by way of cash or deferred payment or any other valuable consideration against the goods. Any other valuable consideration means cash, cheque, promissory note or any other mode of payment equivalent to money. One person sells goods and receives payment and this transaction is called Sale.
In simple for sale there must be two parties one as seller or supplier and another as purchaser or customer and there must be supply and transfer of goods (other than newspaper) by the seller to buyer either by way of sale or resale for valuable consideration i.e. price agreed by parties for the goods sold or purchased. This is called normal sale or direct sale. The State Government has power to impose tax on sale of goods within the state. Under the State Sales Tax Laws, the Sales Tax was applicable only on the sales covered under the sale of goods Act (Normal sale) as shown above.
In works contract there is an agreement between contractor and contractee or client and there is a project development either by construction or repair etc through supply of goods and services and the transfer of goods on the theory of accretion and the price agreed by both parties for the execution of Works contract. The contractor receives money or any valuable consideration in one lump sum or in instalments and delivers the project later after completion and this kind of sale is called Works Contract or Deemed Sale and not normal sale.
Reply From:
ABHIVIRTHI Tax and Industrial Consultancy
R.R.JAGADEESAN
VAT PRACTITIONER AND INDUSTRIAL CONSULTANT
H-63, Palaami Enclave, New Natham Road,
Madurai-625014.
abhivirthi.blogspot.com
Cell: 9994990599
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