Our Recommendations :-
Follow CA IPCC | CA Intermediate FB Page

Which documents are required for vouching in sale-in-transit?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 snehal sule asked over 2 years ago

    3       0 Answer Now Comment Report
4 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

> Which documents are required for vouching in sale-in-transit? --3. When is a sale or purchase of goods said to take place in the course of inter-state trade or commerce — A sale or, purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase— a. occasion the movement of goods from one State to another; or b. is effected by a transfer of documents of title to the goods during their movement from one State to another….” Sec. 6 (2) of CST Act says when goods are in movement from one state to other in pursuance a contract of sale, then any subsequent sale effected by transfer of documents during such movement shall be exempt from CST. The first requirement of a subsequent sale under section 6(2) is that it must have a relative prior sale “in the course of inter-state trade or commerce” which had (a) either occasioned the movement of such goods from one state to another, or (b) was effected by transfer of document of title of such goods during their movement from one state to another. In other words, a movement of the goods in pursuance to a prior sale is the first pre-requisite of a ‘subsequent sale’ contemplated by section 6(2) for enjoyment of exemption.

    0       0 Comment Report
Important Note – Preparing for CA IPCC?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below – 
For any questions Request A Call Back  
Open uri20170510 32134 59004f?1494421790 Anshul Dhawan answered over 2 years ago

3. When is a sale or purchase of goods said to take place in the course of inter-state trade or commerce — A sale or, purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase— a. occasion the movement of goods from one State to another; or b. is effected by a transfer of documents of title to the goods during their movement from one State to another….” Sec. 6 (2) of CST Act says when goods are in movement from one state to other in pursuance a contract of sale, then any subsequent sale effected by transfer of documents during such movement shall be exempt from CST. The first requirement of a subsequent sale under section 6(2) is that it must have a relative prior sale “in the course of inter-state trade or commerce” which had (a) either occasioned the movement of such goods from one state to another, or (b) was effected by transfer of document of title of such goods during their movement from one state to another. In other words, a movement of the goods in pursuance to a prior sale is the first pre-requisite of a ‘subsequent sale’ contemplated by section 6(2) for enjoyment of exemption. e.g. 1.) A of Delhi Orders B of Haryana to sell and dispatch to Delhi 50 bags of black paper. B dispatches the goods and send the railway receipt to A. In the mean time, A had sold identical quantity of same goods to C of Delhi. Instead of himself taking delivery of goods from railway and then delivering those goods to C at Delhi, A transfer to C the railway receipt which was sent to him by B. The sale by A to C is an inter-state sale because it was effected by a transfer of document of title, viz. railway receipt. If C is registered dealer, the sale from A to C may enjoy exemption from tax on fulfillment of other conditions of section 6(2), e.g. The production by A of prescribed certificate and/ or declaration etc.

    0       0 Comment Report
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Chirag answered over 2 years ago

Dear, “3. When is a sale or purchase of goods said to take place in the course of inter-state trade or commerce — A sale or, purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase— a. occasion the movement of goods from one State to another; or b. is effected by a transfer of documents of title to the goods during their movement from one State to another….” Sec. 6 (2) of CST Act says when goods are in movement from one state to other in pursuance a contract of sale, then any subsequent sale effected by transfer of documents during such movement shall be exempt from CST. The first requirement of a subsequent sale under section 6(2) is that it must have a relative prior sale “in the course of inter-state trade or commerce” which had (a) either occasioned the movement of such goods from one state to another, or (b) was effected by transfer of document of title of such goods during their movement from one state to another. In other words, a movement of the goods in pursuance to a prior sale is the first pre-requisite of a ‘subsequent sale’ contemplated by section 6(2) for enjoyment of exemption. e.g. 1.) A of Delhi Orders B of Haryana to sell and dispatch to Delhi 50 bags of black paper. B dispatches the goods and send the railway receipt to A. In the mean time, A had sold identical quantity of same goods to C of Delhi. Instead of himself taking delivery of goods from railway and then delivering those goods to C at Delhi, A transfer to C the railway receipt which was sent to him by B. The sale by A to C is an inter-state sale because it was effected by a transfer of document of title, viz. railway receipt. If C is registered dealer, the sale from A to C may enjoy exemption from tax on fulfillment of other conditions of section 6(2), e.g. The production by A of prescribed certificate and/ or declaration etc. The dealer had entered into a contract with a supplier in the same state and had furnished ‘C’ form to the supplier and directed him to deliver the goods to the petitioner’s customer in another State. It had obtained forms E1 forms its supplier and C form from customer state.

    0       0 Comment Report
Open uri20170510 32134 1c996lj?1494421732 Anil answered over 2 years ago

The whole section 3 read as under: “3. When is a sale or purchase of goods said to take place in the course of inter-state trade or commerce — A sale or, purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase— a. occasion the movement of goods from one State to another; or b. is effected by a transfer of documents of title to the goods during their movement from one State to another….” Sec. 6 (2) of CST Act says when goods are in movement from one state to other in pursuance a contract of sale, then any subsequent sale effected by transfer of documents during such movement shall be exempt from CST. The first requirement of a subsequent sale under section 6(2) is that it must have a relative prior sale “in the course of inter-state trade or commerce” which had (a) either occasioned the movement of such goods from one state to another, or (b) was effected by transfer of document of title of such goods during their movement from one state to another. In other words, a movement of the goods in pursuance to a prior sale is the first pre-requisite of a ‘subsequent sale’ contemplated by section 6(2) for enjoyment of exemption. e.g. 1.) A of Delhi Orders B of Haryana to sell and dispatch to Delhi 50 bags of black paper. B dispatches the goods and send the railway receipt to A. In the mean time, A had sold identical quantity of same goods to C of Delhi. Instead of himself taking delivery of goods from railway and then delivering those goods to C at Delhi, A transfer to C the railway receipt which was sent to him by B. The sale by A to C is an inter-state sale because it was effected by a transfer of document of title, viz. railway receipt. If C is registered dealer, the sale from A to C may enjoy exemption from tax on fulfillment of other conditions of section 6(2), e.g. The production by A of prescribed certificate and/ or declaration etc. The dealer had entered into a contract with a supplier in the same state and had furnished ‘C’ form to the supplier and directed him to deliver the goods to the petitioner’s customer in another State. It had obtained forms E1 forms its supplier and C form from customer state.

    0       0 Comment Report
Similar Questions
Get Notifications
Videos
Books
Notes
Loading
SIGN UP
Watch best faculty demo video classes

These top faculty video lectures will
help u prepare like nothing else can.