CST or VAT for our scenario

[Mihir Kamat]

We are a company registered in Kolhapur, Maharashtra. We have some clients based in Pune, Maharashtra who undertake large projects nationally. They raise Purchase Order on us to manufacture components and deliver to their project sites/customers located inter-state. Is VAT or CST applicable to this transaction? The movement of goods is inter-state as directed on the PO. But the invoicing party is located same state.

[YAGAY and SUN]

Dear Mihir,

This transaction duly falls under Section 3 (a) of the CST Act, 1956.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Mihir Kamat]

Thank you sir for your quick response.

AI Summary

Inter state sale under CST Act: goods directed to move across state lines are treated as inter state supply despite local invoicing.
The manufacture and delivery of components directed by purchase orders to project sites or customers located outside the seller's state is treated as an inter state sale governed by Central Sales Tax provisions, notwithstanding that the invoicing party and buyer are in the same state.