Saturday, February 19, 2011
Inter State Sales
Sales are broadly classified into 3 categories.
a) Inter state Sales
b) Sales in Transit
c) Intra state sales
In case of Inter state sales, the sales tax is collected by the Union Govt. The Central Sales Tax is applicable as per the CST rate applicable for sale within the state or it is 2% upon production of Concessional form (C-Form) by the Purchaser.
As per the senction 6(2) of the Central Sales Tax Act 1956, where a sale of goods in the course of inter state trades or commerce has either occasioned the movement of such goods from one state to another or has affected the transfer of document titles of the goods during their movement to one state to another; Any subsequent sales during such movement effected by document transfers of titles of the goods to any authorised dealer or to the Government shall exempt from Tax. This mechanism is known as Sale In Transit.
The Sale In Transit can be broadly divided in two types.
1) E1-Transaction
2) E2-Transaction
a) Inter state Sales
b) Sales in Transit
c) Intra state sales
In case of Inter state sales, the sales tax is collected by the Union Govt. The Central Sales Tax is applicable as per the CST rate applicable for sale within the state or it is 2% upon production of Concessional form (C-Form) by the Purchaser.
As per the senction 6(2) of the Central Sales Tax Act 1956, where a sale of goods in the course of inter state trades or commerce has either occasioned the movement of such goods from one state to another or has affected the transfer of document titles of the goods during their movement to one state to another; Any subsequent sales during such movement effected by document transfers of titles of the goods to any authorised dealer or to the Government shall exempt from Tax. This mechanism is known as Sale In Transit.
The Sale In Transit can be broadly divided in two types.
1) E1-Transaction
2) E2-Transaction
High Sea Sales
The High Sea Sales is an international trade practices more often used to get the benefits of Customs duties and ownership transfer on the High Sea.
As per the Section 5(2) of The central sales Tax Act 1956, A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.
The High Sea Sales can be done as a bilateral agreement between two registered company in India with subsequent Sale invoice to the buyer and endorsement of the bill of lading in the name of the buyer.
The Date of High sea sales agreement should be always before the vessels or air vessel enters into the customs frontier.
The Bill of Entry gets generated in three copies in the name of the importer (Buyer of the HSS).
The Original is kept with the Customs Dept. The Duplicate copy is for the Importer which may required for customs reconcilliation. The Triplicate copy is sent to Exchange Control Board, RBI through the designated foreign remmitance bank of the Importer.
As per the Section 5(2) of The central sales Tax Act 1956, A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.
The High Sea Sales can be done as a bilateral agreement between two registered company in India with subsequent Sale invoice to the buyer and endorsement of the bill of lading in the name of the buyer.
The Date of High sea sales agreement should be always before the vessels or air vessel enters into the customs frontier.
The Bill of Entry gets generated in three copies in the name of the importer (Buyer of the HSS).
The Original is kept with the Customs Dept. The Duplicate copy is for the Importer which may required for customs reconcilliation. The Triplicate copy is sent to Exchange Control Board, RBI through the designated foreign remmitance bank of the Importer.
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