Sales within State but Buyer Outside State - Whether it would be Local Sale Or Central Sale ?

[PAWAN KUMAR SHARMA]

We have a supplier A inChennai and we have a manufacturing set up in Uttrakhand,

We have also a Job worker B in chennai and we want that our supplier A directly supplies material to Job Worker B.

In that case what would be the Sales Tax i.e. whether CST or VAT ?

Please advice.

[YAGAY and SUN]

It would amount to Interstate Sales as it ends up with Bill to Ship to transaction.  Contract of sale occassion the movement of goods, though within the state but it would be treated as interstate sales.

IT WOULD BE LOCAL SALES AND ATTRACT LOCAL TAX IF DELIVERY AFFECTED WITHIN THE STATE.

[BipadBhanjan dixit]

If the manufacturers' additional place of business is not declared at channai then it is a CST sale because the aultimate sale is effected on Uttrakhand.

[YAGAY and SUN]

In case of interstate sale u/s 3(a), sale is interstate if it occasions movement of goods from one State to other. There should be express or implied stipulation for movement of goods outside the State. Since the goods are being supplied to the jobwork for purpose of doing jobwork and inturn jobworked goods will be moved to Uttrakhand, hence, tentamount to interstatesale.

Dealer at Uttrakhand, would have to furnish Form C to the supplier of the goods at Chennai.

AI Summary

Interstate sale: supply to in state job worker may be treated as interstate if contract contemplates movement out of state.
Classification of a supply to an in State job worker for an out of State principal hinges on whether the contract of sale occasions movement of goods out of the State. If the sale (expressly or impliedly) contemplates inter State movement, it is an interstate sale requiring central sales tax compliance and statutory forms; if delivery is effected within the State with no stipulation for movement, it is a local sale. Declaration of additional places of business may alter the treatment.