TAX LIABILITY

[Guest]

Dear Sirs,

I am consignment agent for an fmcg company, I am getting products from my parent company as Stock transfer and i am issuing Form F for that, In turn I am sending the products to my branches as stock transfer, all my branches are paying the amount for products directly to my Parent company (not in our account the agreement is like that between me and the company), after selling the products they will send sales report to our Parent company and they will pay the taxes from their bank account to sales tax department on our behalf, please clarify me who is responsible for the Sales Tax for the outstanding stocks (not sold or not invoiced) please help me.

[Ganeshan Kalyani]

Keeping other aspects aside, the answer to last sentence is that if there is no sales then there is no consideration received by you and therefore there is no sales tax payable. NO sales tax on outstanding stocks. Further from the query i understand your parent company can only pay the tax on behalf of the branches. They have to file separate return and your branches should provided sales detail to you and you will compile the data with your stock transfer detail and file return. This is my view.

[DR.MARIAPPAN GOVINDARAJAN]

I also endorse the view of Shri Ganeshan Kalyani.

[YAGAY andSUN]

Please also consider the concept and principle of preconceived sales while transferring the stock to your other branches.

[Ganeshan Kalyani]

With due respect, I am of the view that preconceived sale concept is out of question here because the material is first received by consignment agent who is branch itself and subsequently the receiving branch again send the material to various branches again. Since customer is not the third party here and goods are not transferred after the order has been received from customer. I am of the view that preconceived may not apply.

[VIJAY THAKUR]

Dear Sir,

All the goods movement and transfer from Head office to interstate branch, consignment agent of the company, after transfer goods and raw materials tax liabilities burn by the seller not Head office because all goods transfer against statutory Form F these type transactions tax rebate claim after received of central act Form F issue from Sales Tax Department and after sign original/duplicate send to Head Office for tax rebate claim by the Head Office. In absence of Form F you will ready to burn and tax liability due max tax 10% or 12% as per act at the time of Head Office Sales Tax Assessment. No any excision of the CST.

God bless you, So many change in Dvat Act.

Regards

Vijay Thakur

[Ganeshan Kalyani]

'Dvat' means Delhi Value Added Tax.

AI Summary

Sales tax liability: unsold consigned stock is not taxable; Form F and proper returns are required to claim exemption. Goods transferred to branches under consignment or stock transfer are not subject to sales tax while unsold because no consideration has been received; branches must provide sales details so the consignment agent can file returns, and valid Form F is required to claim interstate exemption-absence of Form F exposes the transferor to tax liability.