According to Section 6(2) of CST Act, the first inter-state sale is taxable and subsequent sale during movement of goods by transfer of documents of title to goods is exempt from tax, if the subsequent sale is made to a registered dealer.
Example: Assume National Traders from Karnataka despatches goods to Yukta Traders of Tamil Nadu and raises an invoice on Prerana Traders in Maharashtra. National Traders charges 2% CST and remits the same in Karnataka. During movement of goods, Prerana Traders sells the goods to Yukta Traders in Tamil Nadu. Yukta Traders takes possession of goods and the 'movement of goods’ comes to an end.
The sale from Prerana Traders to Yukta Traders is by way of transfer of documents of title to goods. In the above case, National Traders will receive declaration in ‘C’ Form from Prerana Traders and will issue declaration in ‘E1’ form to Prerana Traders. Subsequently, Prerana Traders will receive declaration in ‘C’ Form from Yukta Traders and issue declaration in ‘E2’ form which completes the cycle. It is important to note that, if this chain is broken CST will be payable.
To Account for Transit Sales
In F12: Invoice / Order Entry Configuration,
Set Accept Supplementary Details to Yes
Set Allow separate Buyer and Consignee names to Yes
Set Activate ‘E1’ and ‘E2’ Transaction to Yes
Go to Gateway of Tally > Accounting Vouchers > F8: Sales
Select As Invoice.
Enter the Date and Reference.
Select the Party to be debited from the List of Ledger Accounts in the Party’s A/c Name field and press Enter to view Despatch Details screen
In the Despatch Details screen, enter the Consignee Name and Address.
Note: Here Consignee is the person, to whom the goods are sold by the buyer (Prerana Traders) during the movement of goods, through transfer of document of title to goods.
Select the Sales Ledger with the VAT/Tax Class - Interstate Sales @ 2% Against Form C.
The VAT/Tax Class appears as - Interstate Sales @ 2% Against Form C.
Select the stock item from the List of Items in the Name of Item field.
Enter the Quantity and the Rate to get the amount in the Amount field.
Select the CST Ledger with the VAT/Tax Class - CST @ 2% Against Form C. The CST Rate and Amount is defaulted automatically.
Set Is e-Sugam Applicable to Yes.
Note: The Commercial Taxes Department of Karnataka has introduced e-Sugam to upload the transportation details of notified goods before the movement of such goods. Set the option - Is e-Sugam Applicable to Yes on sale of Notified Goods else set it to No.
The e-Sugam sub-screen will be displayed for entering the details pertaining to:
Invoice Delivery Date: The invoice date will be captured here.
From Place: Enter the place from where the goods are despatched.
To Place (Destination): Enter the name of place where the goods are to be delivered.
Category of Transactions: The category of transactions as listed in the e-Sugam entry form in the Department website gets displayed as list of VAT Category Type. Select the required category based on the nature of transaction.
Document Type: Based on the Category of transaction selected the Document Type gets displayed in this field. On selecting the following category, two document types get displayed for selection. The required document needs to be selected here:
For the category - V-G For Jobwork/Return After Jobwork/Line Sale, the Document types - LJV Consignment for Sale (Receipts) and OTH Others get listed.
For the category - V-K Others, the Document types - LJV Consignment for Sale (Receipts) and OTH Others get listed.
Transporter Name (Carries Name / Agent): The information entered in Carrier Name/Agent field of Party Details screen gets captured here. Else the Transporter Name can directly be entered in this field of e-Sugam Details sub-screen.
Vehicle Number (Despatch through): The Despatch Through information entered in Party Details screen gets captured here. Else the Vehicle Number can directly be entered in this field of e-Sugam Details sub-screen.
Bill of lading/LR-RR No.: The information entered in Bill of lading/LR-RR No. field of Party Details screen gets captured here. Else the same can directly be entered in this field of e-Sugam Details sub-screen.
Quantity with Units: The quantity entered for each stock item will be captured along with the respective unit of measurement.
e-Sugam Number: The unique number displayed in the e-Sugam acknowledgement obtained on uploading dealer TIN with the transportation details before despatch of these goods needs to be entered here.
Press Enter to return to sales invoice creation screen.
Select C Form from Form Types in the Form to Receive field.
Enter the form series number, form number and date in Form Series No., Form No. and Date, respectively.
Select E1 Form from Form Types in the Form to Issue field.
Note: 'E Form' Types are displayed only if the option Activate ‘E1’ or ‘E2’ Transaction is set to Yes in F12: Configure and C Form is selected as the Form to Receive.
The details of declaration forms entered while recording interstate sales will get printed even on selecting the option - Print in Simple Format to Yes in F12: Invoice Printing Configuration.
Enter the form series number, form number and date in Form Series No., Form No. and Date, respectively. Leave it blank if it is not issued.
Enter Narration, if required.
Press Enter to accept and save.
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