Movement of goods - Applicability of CST or VAT

[madhavvan n]

Company 'A' located in Maharashtra having VAT registration in Maharashtra has placed an order for goods with Delhi vendor for delivery at Delhi the goods are delivered at Delhi to a dealer of company 'A' who will keep the goods with him owner ship rests with Company 'A'. Whether the Delhi vendor will charge CST or local Delhi VAT on this sale by him to the Company 'A' located in Maharashtra. is this a local sale or CST sale. Thereafter Company 'A' wants to move the goods to Mumbai ( in Maharashtra) to its warehouse how can it move the goods through which document.

[Surender Gupta]

The issue a controversial one. It is the movement of goods which governs the applicability of local VAT (ST) or CST. From the query it appears that movement of goods is within the state of Delhi. The the movement of goods and occasion of movement of goods both are in Delhi and predetermined, local VAT may be applicable. However, to my mind contrary views are possible, a detailed brainstorming is required for this issue. I like you to put your view and understanding on the issue for the benefit of members at large.

AI Summary

Movement of goods governs tax character; intra state delivery may attract local VAT rather than CST. Movement of goods determines applicability of local VAT or CST; where movement and occasion of sale both occur within the same state, the transaction may be treated as a local VAT sale rather than a CST sale. The facts indicate delivery in Delhi to a dealer holding goods for a Maharashtra purchaser, so local Delhi VAT may apply. The issue is controversial and open to contrary views. A related question about documentation for subsequent interstate movement is raised but not answered.