Clarification - consignement sale or sale in transit

[A RAVINDRA]

A has sales office in Karnataka and also in Tamilnadu. Registered to VAT in both states seperately. Tamilnadu office of A gets an order from a buyer 'B' in Karnataka. A in tamilnadu places an order on manufacturer 'M' in karnataka with an instruction to deliver the item to 'B' in Bangalore. Can it be construed as consignement sale or sale in transit. Please clarify

[Surender Gupta]

Since the final destination of goods is known prior to movement of goods, the same should not be constituted as consignment sales for the purpose of CST.

[A RAVINDRA]

No Mr. Dinesh gupta. knowing the final destination is not the criteria. Please refer section 8 and also section 5 of cst act.

[Surender Gupta]

Kindly read section 3(b)of CST.

[Surender Gupta]

The language is very much clear. Transfer of documents must be during the movement of goods from one state to another. In the query there is no question of movement of goods from one state to another at any point of time. Since the state that movement of goods from one state to another is not there, same can not be constituted as central sale in the course of consignment.

[Guest]

I agree with the view express by Mr. Dinesh Gupta.

AI Summary

Consignment sale: absence of inter state movement prevents classification as a central sale in course of consignment. Classification as a consignment sale for CST hinges on inter state movement and the transfer of documents during that movement; mere prior knowledge of the destination is insufficient, and where no movement across state boundaries occurs, the transaction cannot be treated as a central sale in the course of consignment.