TaxTMI 
TaxTMI 
What is E1 And E2 Transaction in case of CST exemption.
What is E1 And E2 Transaction in case of CST
23 Jan 2013 
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E1 sale exemption: consignee-named invoices and intermediary endorsements can preserve interstate exemption when seller avoids delivery control.
An invoice naming the ultimate consignee while indicating payment to an intermediary does not negate interstate sale treatment; knowledge of the ultimate buyer before or at commencement of movement is not fatal to the exemption. Endorsement on the LR by the intermediary can formalise the transfer, though it may be impracticable for door delivery. If the seller refrains from controlling movement and delivery to the ultimate buyer, the transaction constitutes an E1 sale and may attract the statutory exemption for interstate sales effected through intermediaries. (AI Summary)
An invoice naming the ultimate consignee while indicating payment to an intermediary does not negate interstate sale treatment; knowledge of the ultimate buyer before or at commencement of movement is not fatal to the exemption. Endorsement on the LR by the intermediary can formalise the transfer, though it may be impracticable for door delivery. If the seller refrains from controlling movement and delivery to the ultimate buyer, the transaction constitutes an E1 sale and may attract the statutory exemption for interstate sales effected through intermediaries. (AI Summary)