App;icability of Sales Tax

[Pradeep Jain]

Dear Sir,

We are going to import Engine Components from the Overseas Suppliers. For the manufacturing of the said components , he has developed some toolings.

We need to reimburse the said tooling cost to the overseas supplier.

We are also paying service tax on the Development of the Toolings Cost because the Overseas Suppliers has no office in India.

Further, Components supplied by Over Seas Supplier would be consumed in the Engine and the same would be supplied to Demostic Customer, at Chennai ( T.N.).

Now, we have to get  the above said amount of  Tooling Development Cost from our  Demostic Supplier.

For this purpose we want to raise Sales Invoice for Tooling Development Cost and with  appropriate amount Service Tax payment .

Now Our Query is that:-

1- Since there is no physical movement of Goods from one state ( M.P. ) to another State (T.N.) then:-

    (a) is there need to pay CST;

   (b) If yes then our Customer can issue C-form

  ( C)  OR to pay full rate of CST , without - C-Form.

 Please give  your opinion.

 Regards

 Pradeep Jain

AI Summary

Sales Tax Clarification: Full Central Sales Tax May Apply on Tooling Costs Without Physical Goods Movement or C-Form. A query was raised regarding the applicability of sales tax on tooling development costs reimbursed to an overseas supplier for engine components. The components, used in manufacturing, are imported and consumed domestically in Chennai, India. The inquirer seeks to raise a sales invoice for these costs and is unsure about paying Central Sales Tax (CST) due to the absence of physical goods movement between states. The reply clarified that without physical movement of goods, the concessional tax rate is not applicable, implying full CST may be required without a C-form.