• Inter-state sales of goods

Hello, I have a doubt and want to understand something about inter-state sales of goods. I am a new entrepreneur from MP and want to purchase raw material from Gujarat. Final product will be manufactured at the same vendor from where I am going to purchase raw material, after that product will be directly hand over to the distributor of Gujarat itself. Overall Now, if we see, the production will not come to my place (MP). Manufacturing and sales will be outside the state. Now as a new entrepreneur I am very confused that how the transaction will be done so that it can be reflected in Tax. What are the forms that would be required to fill or generate? What about FORM 402..it would be required or not? Please help me to outcome this confusion and suggest me a way to this in a proper way.
Asked 7 years ago in VAT

Hello Sir,

If you are manufacturing in Gujrat & selling in Gujrat then it will be better for you to get registered under Gujrat Vat since you can claim the VAT credit benefit. If you are registered in MP, then the transaction will involve CST and hence a higher cost.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
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