Sale tax knowledge

[Vishal Pundir]

A recent incident happen with me i have a timber firm in uttar pradesh i made a sale to a firm in haryana showing dispatch from madhya pradesh but when my goods reaches chahtisgarh the sale tax officer caught my goods by saying that i can not make these type of interstate sale showing dispatch from another state and fined me with the double amount of gst i want to know is the officer right is it true that i can not make sale like this by paying IGST WITH EWAY BILL GENERATION plz help

[Sadanand Bulbule]

Dear

It can be understood that, this is a "Bill to Ship to" transaction covered by the following provision. If the required documents for such transactions were valid at the time of interception of the conveyance, then the authority is wrong in levying penalty. You can contest it under Section 107[1] of the CGST Act.

PLACE OF SUPPLY OF GOODS OR SERVICES OR BOTH

Place of supply of goods other than supply of goods imported into, or exported from India.

10. (1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,––

(a) where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;

(b) where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person;

(c) where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient;

¹[(ca) where the supply of goods is made to a person other than a registered person, the place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the location as per the address of the said person recorded in the invoice issued in respect of the said supply and the location of the supplier where the address of the said person is not recorded in the invoice.

Explanation.—For the purposes of this clause, recording of the name of the State of the said person in the invoice shall be deemed to be the recording of the address of the said person;]

(d) where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly;

(e) where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board.

(2) Where the place of supply of goods cannot be determined, the place of supply shall be determined in such manner as may be prescribed.

[KASTURI SETHI]

Dear Querist,

You have committed procedural/technical lapse.

I concur with the views of Sh. Sadanand Bulbule, Sir.

For your guidance, here is an extract of FAQs released by CBIC:-

Q No.5 (Part) How to handle “Bill to” - “Ship to” invoice in e-way bill system?

Ans. Sometimes, the tax payer raises the bill to somebody and sends the consignment to somebody else as per the business requirements. There is a provision in the e-way bill system to handle this situation, called as ‘Bill to’ and ‘Ship to’.

In the e-way bill form, there are two portions under ‘TO’ section. In the left hand side - ‘Billing To’ GSTIN and trade name is entered and in the right hand side - ‘Ship to’ address of the destination of the movement is entered. The other details are entered as per the invoice.

In case ship to state is different from Bill to State, the tax components are entered as per the billing state party. That is, if the Bill to location is inter-state for the supplier, IGST is entered and if the Bill to Party location is intra-state for the supplier, the SGST and CGST are entered irrespective of movement of goods whether movement happened within state or outside the state.

[Ganeshan Kalyani]

I agree with the view of the experts.

AI Summary

Timber firm faces double GST penalty for interstate sale with dispatch from different state A timber firm owner from one state made an interstate sale to a buyer in another state but showed dispatch from a third state. Tax authorities intercepted the goods and imposed a penalty of double the GST amount, claiming such interstate sales with dispatch from different states are prohibited. The owner questions whether this enforcement action is legally correct despite having paid IGST and generated proper e-way bills for the transaction.