Purchase from unregistered dealer in different state

[Guest]

Dear Experts, Pl Advise.

 

I am starting an online store. The firm is registered in Bihar. In this online store, I will be purchasing goods from different states in India. In most of the cases, the purchase will be done from unregistered dealers. These goods, after purchase, are not being transported to Bihar for stock. They will be sent directly to the consumer, from that state. The sales will happen directly to consumer, who will be in any state of India.

eg: B, a consumer buys product X from my online portal. B is from Bangalore, Product X is from Kashmir and firm is registered in Bihar. Product X, goes directly to B from Kashmir. The billing is done by our firm, which is registered in Bihar.

 

Pl Advice on following:

The unregistered dealer will not be able to generate invoice. Even if he generates invoice, the he will not be having TIN / VAT number. And we are selling goods by applying CST / VAT charges (which ever is applicable).

1) In Purchase, will the invoice amount be considered as including tax paid? In Case No, then do we have pay CST above the price and to which state government?

2) Is form C or any other form has to be filled for purchase?

3) How is tax applicable in our invoice?

4) Any other important point to be kept in mind?

[V K]

Un-Registered Dealer Can Not make an Inter State Sales....................

Regards... Vikas Kapoor

[SURESH ASTEKAR]

The transaction given in the example cited by you is an inter-State sale transaction and hence it would attract CST.  CST is liable to be paid to the State Government from which the goods begin their inter-State movement.  In the example given by you, J&K will be the State which will be entitled to collect the CST.  Your buyer may not be a registered dealer and hence will not be able to give C Form to you.  Hence concessional CST will not be applicable and CST applicable will be the full rate of J&K VAT applicable to the goods in question.  Further, the invoice will have to be in your company's name.  Therefore, you will be liable to take CST registration in J&K (so also in other States from where you would like to trade).  In the invoice you will have to show the breakup of the amount charged for the goods and the tax components separately.

SURESH ASTEKAR

9980726367

AI Summary

Inter-state sale tax liability: CST payable to state of origin; concessional rate unavailable without Form C. Inter-State sales dispatched from a supplier's State to a consumer elsewhere attract Central Sales Tax payable to the State of origin. Absence of a purchaser's statutory declaration (Form C) means concessional CST is unavailable and the full State origin rate applies. The registered buying firm must show tax breakup on its invoice and, where required by the originating State, obtain CST registration to comply with tax and invoicing obligations; an unregistered dealer cannot validly effect inter-State sales or provide declarations reducing CST liability.