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March 2009

Tax Treatment of Goods sent to other States.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Tarun Ghia, Nimesh Dedhia, Vijay Kewalramani
Chartered Accountants
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Part B : INDIRECT TAXES


48 Tax Treatment of Goods sent to other
States.

Trade Circular 5T of 2009, dated 29-1-2009 :




  • It appears that the question whether S. 6A deals only with transactions
    between agent and principal or whether it deals with transactions which are on
    a principal-to-principal basis was not raised before the decision dated 17th
    August 2007 in the case of M/s. Ambica Steels Ltd. v. the State of Uttar
    Pradesh     (All.) It is, therefore, decided that in such cases, declaration
    in Form F will be issued as per normal procedure.



  • There is no change in the views expressed in Trade Cir. 16T of 2007, dated
    20th February 2007 that S. 6A will have no application as regards transactions
    on principal-to-principal basis.



  • In the aforesaid Trade Circular dated 20th February 2007, a view has been
    taken that when goods are sent to another State for job work or for
    manufacturing, etc., the transaction will normally be on a principal to
    principal basis with an independent operator and not on a principal to agent
    basis.



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