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Section 5 The Central Sales Tax, 1956

The Central Sales Tax, 1956

 

 

5. WHEN IS A SALE OR PURCHASE OF GOODS SAID TO TAKE PLACE IN THE COURSE OF IMPORT OR EXPORT. –

 

(1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India.

 

(2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.

 

1[(3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export.]

 

2[(4) The provisions of sub-section (3) shall not apply to any sale or purchase of goods unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed authority.

 

(5) Notwithstanding anything contained in sub-section (1), if any designated Indian carrier purchases Aviation Turbine Fuel for the purposess of its international flight, such purchase shall be deemed to take place in the course of the export of goods out of the territory of India.

Explanation.—For the purposes of this sub-section, “designated Indian carrier” means any carrier which the Central Government may, by notification in the Official Gazette, specify in this behalf.]

 

COMMENTS

 

Exemption under this section is allowed only when the commodity exported is the same as commodity purchased, no exemption where paddy is purchased and rice is exported. But after 1996 they were deemed to be the same commodity as per section 15 (ca); Satnam Overseas (Exports) v. State of Haryana, (2003) 130 STC 107.

 

Sale in the course of import

 

When the bill of lading is endorsed while the consignment is still on the high seas and the sale was in the course of import, as it was effected by transfer of documents to the goods before they had crossed the limits of the customs. The sale was covered by the latter part of section 5 (2) read with section 2 (ab) and as it was in course of import hence not liable to Sales Tax; Minerals and Metals Trading Corporation of India Ltd. v. Sales Tax Officer, (1998) 111 STC 434.

 

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1. Ins. by Act 103 of 1976, sec. 3 (w.r.e.f. 1-4-1976).

2. Ins. by Act 18 of 2005, sec. 90 (w.e.f. 13-5-2005).

 

 

 

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Central Sales Tax, 1956

 

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