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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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