What should applicable VAT / CST

[Guest]

Dear Expert,

My company is private limited co. situated in Jaipur (Rajasthan), I have bill to Mumbai and buyer is Rajasthan person. means Goods not move to out of state. My question is what should applicable VAT/CST.

[YAGAY and SUN]

Dear Chandan,

Since goods are not being moved out of Rajasthan, therefore, it is not a fit case under Section 3 (1) of the CST Act, 1956. For levy of CST, subject goods must be moved from one state to other. But in this matter it is not happening. Hence, VAT would be applicable under the provisions of RVAT Act read with Rules made thereunder.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[Ganeshan Kalyani]

You can bill it to Mumbai as seller billing address and deliver the goods at Rajasthan location of the buyer by charging local vat tax. It is good for buyer as he can avail set off.

AI Summary

Interstate movement requirement prevents CST application; local VAT applies when goods remain within state and buyer retains input tax credit. When goods are not moved out of the State, the transaction does not meet the interstate movement requirement for CST and is therefore subject to State VAT (RVAT). A seller may bill to a different city address while delivering within Rajasthan, but must charge local VAT on the intrastate supply so the buyer can avail input tax credit.