Implication of Sale tax

[Sudhakar Sinha]

I A is a manufacturer, B is Supplier and C is Purchaser. C inspect the goods manufactured by A at premises of B and then the B transfer the goods to C. A, B, & C are in different state. then kindly explain the implication of Sale tax in this case

[YAGAY and SUN]

Dear Sudhakar,

We are afraid that above scenario does not fit under the either sections 3A and 3B of the CST Act, 1956.

It would be treated as simple interstate sale and would not fall under the E-1 Transaction.

Regards

Team YAGAY & SUN

(Management and Indirect Tax Consultants)

AI Summary

Interstate sale classification applies where manufacturer, supplier and purchaser are in different states, not an E 1 transaction. Where manufacturer, supplier and purchaser are in different states and the purchaser inspects goods at the supplier's premises before the supplier forwards the goods, the transaction does not qualify as an E 1 Transaction and should be treated as an Interstate sale for CST/VAT purposes.