purchase from same state and material delivered to another state

[premchand talreja]

we are based in Mumbai, we intend to purchase some machinery from maharastra based manufacturer and supply it to customer based in Rajasthan. The material will be directly transported by manufacturer to our end customer. what are the requirements and how should we treat this transaction.

[Ganeshan Kalyani]

Sir, the provison of in transit sale is applicable in your case. Form C/E1 is applicable. Thanks.

[YAGAY andSUN]

In our view, this is not a transit sale under CST Act, 1956. Please check proviso to Section 3 (a) and 3(b) read with Section 6 (2) of the CST Act. There are plethora of judgment which says the first sale should be interstate sale. In this transaction Goods are being procured from Maharashtra based supplier and supplied to Rajasthan based customer but the middle man is in Mumbai which is in Maharashtra.

[Ganeshan Kalyani]

Sir, I have replied based on practical experience. Also I will have read an article on the subject. I shall find out the same and reproduce here. We shall discuss on the same.

Sir, I also agree with you because if there are favouring judgments there are against as well. Thanks.

AI Summary

Complex Tax Implications for Machinery Sale: In-Transit or Not? Conflicting Judgments Under CST Act, 1956 A business based in Mumbai plans to buy machinery from a manufacturer in Maharashtra and deliver it directly to a customer in Rajasthan. The query concerns the tax implications of this transaction. One respondent suggests it qualifies as an in-transit sale, requiring Form C/E1. Another disagrees, citing the CST Act, 1956, and arguing it is not an interstate sale since the intermediary is also in Maharashtra. The discussion highlights differing interpretations and the presence of conflicting judgments on the matter, emphasizing the complexity of tax treatment in such transactions.