OMS SAL WITHIN THE STATE

[SURYAKANT MITHBAVKAR]

We are registered dealer in Mumbai State and willing to make sales from Delhi to Delhi where in our Customer (Consignee) and Manufacture (Consignor) situated in Delhi State.

Pl advice the chain of above sale and CST impact (Applicable) and role of E-I & E-II form.

[ashish chaudhary]

Applicability of CST does not depend upon the location of buyer or seller but on the movement of goods. In your case, the goods move within the state of Delhi only, no CST applicable.

[SURYAKANT MITHBAVKAR]

Thanks for your suggestion, but in our case we are raising our sales invoice as dealer from Mumbai wherein Goods movement within Delhi .

In short, We buy the goods from Delhi and sale it to Delhi Customer without bringing to Mumbai. Our Delhi vendor (Manufacture) raised invoice showing our name as buyer and our customer name as consignee and charged CST @2% against Form 'C'.

In our side we raised sales Invoice to our customer who is situated in Delhi and charged CST @2% against Form 'C'.

Please advice us whether this procedure is valid under CST Act.

[SURESH ASTEKAR]

Dear Suryakant

Even though you are a dealer in Maharashtra, in the instant case the goods have not moved out of Delhi and hence the sale is an intra-State sale and not an inter-State sale. Therefore, your Delhi vendor ought to have charged Delhi VAT and not CST @ 2%. Further, you also ought to charge DVAT on your Delhi customer and not CST. The question of C Forms does not arise at all in this transaction. Actually you need to take DVAT Registration in Delhi. You can avail Input Tax Credit of the DVAT charged by your vendor. Therefore, the transaction as described by you is not valid in law.

[Sanath Shetty Shetty]

When you do not have place of business in Delhi, How can one get a Delhi DVAT Registration when your business office is in Mumbai, please?

[SURESH ASTEKAR]

Dear Sanath Shetty,

If you do not have place of business in Delhi but you carry on the activity of buying and selling in Delhi, you are mandatorily required to obtain registration under Section 18 of the DVAT Act provided your transactions exceed or are likely to exceed ₹ 20 Lakh per year. Further, the tax under DVAT is to be paid by every dealer. Further, even if your transactions do not exceed ₹ 20 lakh per year, you may still obtain voluntary registration under DVAT so that you can take input tax credit on your purchases and deduct the same from your output tax. Please note that the definition of dealer specifically includes a casual trader and a casual trader is defined as "a person who, whether as principal, agent or in any other capacity undertakes occasional transactions in the nature of business involving buying, selling, supply or distribution of goods or conducting any exhibition-cum-sale in Delhi whether for cash, deferred payment, commission, remuneration or other valuable consideration". Therefore, depending upon your taxable quantum, you may decide whether to obtain registration and carry on the business in Delhi or to forego Input tax credit if it is only a one-off transaction with small amount of turnover. Of course, if you intend to obtain registration in Delhi, you need to obtain a business premises in Delhi.

[Sanath Shetty Shetty]

Thank you very much for the clarifications.

[Ravikumar muthusamy]

Goodos to Mr.SURESH ASTEKAR

Very nice and excellant info.

AI Summary

Dealer Must Register for DVAT in Delhi for Intra-State Sales, Even Without Business Premises, to Avail Tax Benefits A registered dealer in Mumbai is seeking advice on the tax implications of selling goods from Delhi to Delhi without moving them to Mumbai. The goods are invoiced by a Delhi manufacturer to the Mumbai dealer, who then sells to a Delhi customer, charging CST at 2% against Form C. Respondents clarify that since the goods do not move out of Delhi, the transaction is intra-state, requiring Delhi VAT instead of CST. The dealer should register for DVAT in Delhi to comply with the law and avail input tax credit, even if they do not have a business premises in Delhi.