Inter State Sale CENTRAL SALES TAX cs executive professional notes
Introduction As stated in the introduction one of the objectives of CENTRAL SALES TAX ACT is the following:
(iv) “To formulate principles for determining--
(a) When a sale or purchase takes place in the course of inter-state trade or commerce.
(b) When a sale or purchase takes place outside a State.”
Section 3: This section defines the inter-Sate sale
in the following words.:
“ A sale or purchase of goods shall be deemed to take place in the course of inter-state trade or commerce if the sale or purchase-
(a) occasions the movement of goods from one state to another ; or
(b) is effected by a transfer documents of title to the goods during their movement from one State to another.
Explanation 1.—Where goods are delivered to a carrier or other baileee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee.
Explanation 2.— Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State”.
An analysis of the above definition would reveal that there are two parts of Section 3 which lay down the circumstances under which the sale is said to take place in the course of Inter-State Trade or Commerce.
Section 3(a) deals with inter-state sale which occasions the movement of goods from one state to another.
Section 3(b)deals with sale which is effected by transfer of documents of title to the goods during their movement from one State to another.