6 (2) Sales

[Asked by Guest]

purchase form mumbai ₹ 358000 But goods Despatch from bangalor to kolkata ₹ 298000 which form given muimbai ₹ 358000

[Ganeshan Kalyani]

Material movement is essential to determine the taxability under Central Sales Tax. In the case referred above it seems that billing is done from Mumbai but delivery has happened from Bangalore to Kolkatta. But whether place from where the supplies has moved the material is the place to the assessee. If yes then it is bill to ship to transaction.

[YAGAY and SUN]

Subsequent sales during the movement of the goods from one state to another have been exempted under section 6(2) of CST Act. When sale is done while goods movement from one state to another is called E-I transaction or sale in transit. The sale is done by endorsement or delivery of documents of title. Further such transfer of goods is exempt under the provision of Sec 6(2) of CST act 1956. Section 2(4) of the Sales of Goods Act permits transfer of goods by ‘endorsement or delivery of documents of title. Thus documents of title of goods can be transferred by mere delivery or by endorsement on document

AI Summary

Sale in transit principle exempts subsequent interstate transfers when title documents are endorsed and delivery occurs during movement.
Subsequent sales effected while goods are moving between states-where delivery occurs from a state different from the billing origin-are governed by the sale in transit concept; material movement and the transfer of documents of title by endorsement or delivery determine exemption treatment under the statute.