VAT on interstate transaction - E-1/E-2 sale

[K chandrakar]

we are in chhattisgarh our client in mumbai & supplier is also in mumbai. we placed an order to supplier to supply the consignment to our client of mumbai under 6(2) transection or sale in transit basis (E-1/E-2) basis. he is charging VAT for it. is it currect porcess. we are insisting him to dispatch the consignment against c form & but they are saying this is wrong process please explain it throurh proper notification & circular reference.

AI Summary

Interstate movement determines VAT or CST applicability; delivery intent governs tax treatment on E 1/E 2 sales.
Applicability of VAT or CST on an E 1/E 2 sale hinges on intended movement of goods; when goods are not intended for delivery outside the state of origin, CST will generally not apply and local VAT will be attracted, affecting whether a C form should be sought or the supplier's VAT charge is appropriate.