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

[YAGAY andSUN]

Since, there is no physical movement of goods, therefore, concessional rate of tax wouldn't be applicable. 

AI Summary

Sales tax applicability where no physical movement of goods may preclude concessional interstate tax rates, affecting CST treatment. Reimbursement of tooling development costs invoiced domestically for imported engine components, where supplier lacks Indian establishment and goods are consumed in a different state, raises CST questions; absence of physical inter state movement means concessional interstate tax treatment is not available and concessional CST rates would not apply.