Sending Machinery Demo, VAT + CST

[Sheetal patil]

Sir / Madam,

We are seding machinery for demo ( interstate ) shall we have to intimate to Sales tax dept (VAT) and kindly send us format of letter to be submited to Commissioner.

M - 9844325169

Posts / Replies

[Ganeshan Kalyani]

As per VAT Act, tax is payable on sale price received from customer. The goods sent as demo will have no transaction value and there is no sale either and thus no consideration. Also in my view VAT rules does not requires to call for intimation to department about such transaction. However, views of other experts are welcomed to bring more clarity in this respect.

[Ganeshan Kalyani]

As per VAT Act, tax is levied on sale value. The said transaction in your query is a demo and not sale. VAT Act does not provide for any intimation to the department in such cases. However view of experts are welcomed to bring more clarity in this issue.

[Sheetal patil]

Thanks sir for your valuable reply and information.

[PARTHASARATHY V]

I do agree with the above to points, when there is no sales there will not be any tax on the goods. It is better to mention the caption in the Invoice" GOODS SENT FOR DEMO PURPOSE ON RETURNABLE BASIS". If the goods sold at Demo place then you can raise a debit note on VAT/CST and pay to the department. Or if the customer wants to have the Tax Invoice with ED / VAT/CST then you have to bring back the materials, make SRN (Sales Return Note) for cancellation of old Transaction ( Keep the LR of Inward / returned materials for assessment purpose) and make fresh Invoice.

[Ganeshan Kalyani]

Thanks Parthasarathy sir for sharing your views.

[KASTURI SETHI]

Excellent interpretation indeed. Learnt a lot about VAT from Sh.Parthasarathy V and Sh.Ganeshan Kalyani, Sirs. Thanks.

[Ganeshan Kalyani]

Thank you so much Kasturi sir for liking reply.