Hi I (x) am a maufacturer and i need to send some furniture components from Haryana to an independent firm (y) at Delhi for fitting and finishing (jobwork) and then supply to a company (z) at CST (billing from Haryana to Delhi). I need an "how to" advice on interstate transfer of goods for jobwork. Also if, the flow of transfer of goods is x to y (for jobwork) to z for final sale, i need to know if it would be legal to supply the goods directly from y to z after the jobwork as both y and z are in Delhi and x is in haryana. Please advice on the above and also highlight if i am missing something. Thanks
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1. Have you entered into a bilateral or tripartite contract with Y or Y & Z? Who has been entrusted with the task of supply to Z?
2. The chain of supply has to be the one laid down in the contract.
3. I think what you are missing is an executable contract.
1) it would be necessary to fill in declaration in form F for inter state transfer of goods for processing or goods received after processing
2) Section 6 A of CST act makes it mandatory to fill in form F for transfer of goods from state which have taken place other wise than by way of sale
3) SC has upheld judgement of Allahabad HC in the case of Ambica steel v/s state wherein it was held that necessary to fill in declaration in form F for inter state transfer of goods for processing or goods received after processing
Thanks for your valuable reply. In the same case, the volume of goods being high, the customer will accept the delivery in small portions on daily basis for a period of 2 months, so would it be legally possible to rent a temporary warehouse in Delhi even when the manufacturer is registered in Haryana only or do we have to apply for a tin no of Delhi territory in order to perform the functions of storage and delivery only? ( which would thus create an issue of invoice taxation which currently is @ 2% CST and if we get registered in Delhi then we would have to bill @ 12.5% VAT) Please advice
you can rent a warehouse in delhi for storage of goods .section 6A provides that no central sales tax is leviable in case of inter state stock transfer . if however you had pre existing agreement for sale of goods so transferred CST would be levied
The burden of proving that the movement of those goods was occasioned NOT by reason of
sale shall be on the dealer transferring the goods to his branch. For this
purpose, he may furnish Form F to the assessing authority, within 3 months from the end of
the period to which such form relates obtained from the principal officer of the other place of
business, or his agent or principal.
1. Since the volume of goods is high which will be accepted over a period of 2 months you should execute a contract to safeguard your legal interests.
2. The Haryana registration of the manufacturer does not prevent you taking on rent a warehouse in Delhi.
1. You can send the components from Haryana for job work to Y at Delhi,
2. After the jobwork ia over, Y can deliver the finished goods to Z against challan,
3. You can raise Invoice from Haruana on Z enclosing copy of the challan as proof of delivery thus affecting interstate sale charging CST.
1. You are not required to apply for TIN for hiring a warehouse for storing your goods coming out of Y's unit at Delhi,
2. You can hire a warehouse at Delhi by registering yourself with Shops and establishment department but without registering with Commercial Tax Department,
3. Alternatively, you can ask Y to hire a warehouse claiming the rent from you.