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Inter state sale intra-state sale and stock transfer

Inter state sale intra-state sale and stock transfer

Following table shows all details regarding Inter state sale intra-state sale and stock transfer :

Types of Inter-state saleInter State can be either direct u/s 3(a) or by transfer of documents u/s 3(b) of CST Act.
Sale should occasion movement of goods u/s 3(a)In case of inter state sale u/s 3(a), sale is inter state 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.
Movement of goods can be under agreement to sale u/s3(a)Sale is inter state even if goods move from one State to another under ‘agreement to sale’. The agreement may be express or even implied. Movement of goods should be inter-linked with sale or agreement to sale.
Property in goods can pass in either State u/s 3(a)In inter-state sale, property in goods can pass to buyer in either State. Sale can be inter-state even if buyer takes delivery of goods within the State, if he is required to take the goods outside the State.
Buyer and seller can be in same State u/s 3(a)Sale can be inter state even if both buyer and seller are in same State if goods are moving out of State on account of sale.
Sale by transfer of documents u/s 3(b)Inter Stale sale can be by transfer of documents of title during movement of goods from one State to another u/s 3(b) of CST Act. Sale can be inter-state even if buyer and seller are in same State.
Meaning of ‘during movement of goods’ for purpose of section 3(b)The movement of goods commences as soon as goods are handed over to transporter. The ‘movement’ is deemed to be continuing till delivery of goods is taken at other end.
Exemption to subsequent sale during movement of goods u/s 3(b)E-I/E-II transactions are required to establish sale during movement. If done, all subsequent sales are exempt from sales tax/Vat.
Stock transfer/Branch transfer of goodsIn stock/branch transfer, goods move from one State to another, but there is no ‘sale’. Goods are sent to branch or depot or consignment agent in other State. Stock transfer/branch transfer is not subject to tax since there is no ‘sale’.
Stock transfer can be only of standard goods where buyer is not knownStock transfer can be only of standard goods. Stock transfer of tailor made goods for a specific customer is a bogus stock transfer. It can be held as inter-state sale and sales tax may be payable.If buyer is identifiable before goods are dispatched, it is ‘Inter State’ sale and not a ‘stock transfer’.
Form F for stock transfer/branch transfer of goodsForm F is required to be submitted to establish stock transfer. Sales Tax Officer can make enquiry regarding truth of contents in form F.
Double taxation of stock transfer/branch transfer held as inter state saleIf dealer claims dispatches as stock transfer but Sales Tax Authorities treat it as ‘sale’, there is double taxation. In such case, CST Appellate Authority can grant relief.
Sale subsequent to stock transfer/branch transferAfter stock transfer, sale in that other State is first sale and State sales tax (Vat) will be payable.
Sale inside the StateIf a sale is inside one State, it is outside all other States.
Sale in case of ascertained/unascertained goodsIn case of specific or ascertained goods, sale within State takes place at the time of contract. In case of unascertained or future goods, sale takes place when goods are appropriated to contract in the State.
Sale inside the State is a ‘residuary sale’If sale is inter-state as defined in section 3 of CST Act, it can never be ‘intra state’ sale. Thus, inter-state sale is a residuary sale.
Sale not export if no specific destinationSale when there is no specific foreign destination is local sale. It is not export sale. Sale to ship which is within territorial waters is ‘local sale’.
Sale within territorial waters of India is local saleSale within territorial waters of India i.e. within 12 nautical miles from the base line on the coast of India the is ‘local sale’. It is not inter-state sale.

Inter state sale intra-state sale and stock transfer


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