Stock transfer to other state weather CST is required to be paid

[sourabh raha]

Dear Member, 

             Is it necessary to pay the CST if we are only doing stock transfer to other state depot ?My company is only involve in making good for other company all the material for the goods are provided by the parent company and after the production is completed the finished good are transfered to the depot of the parent company which is situated in the other state.

Pls guide me in this regard as early as possible...

Thanks in advance

Sourabh Raha

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Sourabh Raha

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[shilpa R]

Hi sourabh raha,

To constitute interstate sales, one of the basic requirement is that there should be sale. If a person sends goods outside from its state to its branch office in another state then it is not sale because you cannot sell goods to yourself. Similarly if a dealer sends goods to its agent in another state who stocks and sells goods on behalf of the dealer, such agent is called consignment agent and such stock transfer is also not considered as interstate sales since there is no sales involved in it, sales will take place when such agent will sell goods. But to prove such stock/branch transfer, F form is required to be produced as proof.

F form required for stock transfer- F form is required to be produced as proof of stock transfer. As per section 6A(1) submission of F form is mandatory to prove stock transfer. Otherwise, the transaction will be treated as sale for all purposes of CST Act.

F Form is issued by the branch office/consignment agent receiving goods as branch/stock transfer to its head office/principal who is sending the goods by way of  stock/ branch transfer. The H.O./Principal produces such F forms to its assessing authority to prove such stock/branch transfer.

If F form is produced for such stock transfer,it is considered as stock transfer and not as sale so it does not come under CST Act. As far as i know the depot are created in order to avoid taxes.

Others view solicited.

Regards,

Shilpa. R

CS student and trainee

[sourabh raha]

Hi shilpi

                  Thanks for your reply.But as I know stock transfer means transfer to own depot not to other company depot.My Company as I earlier said involve in making good for some biscuit company , all the raw material are provided by the biscuit company we only bring raw materila to finished good n then transferrd to the depot of biscuit company which is situated our the our state..Even biscuit company has no control over the production of biscuit ,they only appoint a person from their company to look after the quality control of biscuit.
Now if after making biscuit I transferred the biscuit to biscuit company depot weather Form F is sufficient or I need to pay the CST.

Regards
Sourabh

[ankit vageriya]

Dear , 

CST is applicable , because Stock Transfer define that there should be in similar form at both time, nothing could be change. Even if Stock is come into a Drum and you packed it in Bags or any other form , there is also consider as Pakaging and  it would liable to CST as per State. shortly  if any new form generate it will levy CST as per applicable rate as per State.

thanking you 

Ankit Vageriya