Validity and determination of sale

[RAJESH MISHRA]

Dear Sirs, Can we make transaction as per the below queries? If yes, kindly specify validity & nature of sale (Central / Local) with notification / rule & section. Query 1: In a transaction there are involve three dealers namely A of Mumbai, B of Delhi & C of Mumbai. Dealer B of Delhi wants to deliver / sale (sale in transit), Dealer C of Mumbai after purchasing goods from A of Mumbai. All three are registered dealer and having local & central registration certificate from their respective state. Is this sale is a valid sale or not? If it is valid sale kindly specify validity & nature of sale (Central / Local) with notification / rule & section. Query 2: Is predetermined sale can be termed as E-1/ E-2, sale? For example, in a transaction there are involve three dealers namely A of Mumbai, B of Delhi & C of U.P. Dealer B of Delhi instructed Dealer A of Mumbai to deliver goods to Dealer C of U.P. directly. Is this predetermined sale can be termed as E-1 sale i.e. sale in transit. Kindly give your valued suggestions with some judgment made earlier in this regard.

AI Summary

Interstate movement of goods determines central sale classification; predetermined delivery may affect tax credit availment under CST.
Whether a transaction is a central sale depends on movement of goods between states under Section 3 of the Central Sales Tax Act; without interstate movement a sale is not a central sale. E 1/E 2 designations relate to CST/form C and apply only where goods actually move across state borders. Predetermined deliveries between parties in the same state therefore do not prima facie qualify as central sales, though complications may arise affecting tax credit availment and procedural compliance.