Status of Sale

[Ajay tripathi]

Seller & Buyer are located in Delhi & goods consigned to MP(interstate). Seller charging 2% cst Agst C forms from buyer whom located in Delhi( E1 Sale) .pls confirm the status of sale.

[Surender Gupta]

I think it is transaction which is being done by most of the dealers against C form along with E-1 form. It is an acceptable transaction.

Buyer and Seller can be in same State In CST, UP v.Mevalal Kewal Kishore - 1976 38 STC 551 (All. HC) - Both dealers A & B were from UP. A entered into an agreement with B. Under the agreement, food-grains were despatched by A to a place outside the State. Railway Receipt was obtained in the name of 'Self' i.e. A himself. The RR was then endorsed by A to B. Allahabad High Court held that it is transfer by delivery of document of title to goods and hence sale by A to B is an Inter-State sale. Same view in Duvent Fans v. State of Tamilnadu 1999 113 STC 431 (Mad HC DB),Regards, Pradeep Khatri, Indirect Tax Consultant, [email protected]

AI Summary

Inter state sale: endorsement or transfer of the document of title renders the transaction inter state, permitting CST treatment.
Where goods are despatched outside the State and title passes by transfer of the document of title (e.g., a railway receipt issued in the seller's name and endorsed to the buyer), that transfer constitutes an inter state sale even if seller and buyer are located in the same State, making the practice of charging CST against C forms in such E 1 style transactions an accepted approach.