ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 29.09.2025
CESTAT Delhi clarified the distinction between stock transfers and inter-State sales
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
The Central Sales Tax Appellate Tribunal recently delivered a significant judgment in favor of the Steel Authority of India Ltd. (SAIL) regarding the classification of transactions as stock transfers versus inter-State sales. β This decision, pronounced on September 26, 2025, has far-reaching implications for businesses operating across multiple states in India, particularly those in manufacturing and distribution.
Background of the Case
The dispute revolved around the movement of goods from SAIL’s Rourkela Steel Plant in Odisha to its branches in other states during the assessment years 1989-1990, 1991-1992, 1992-1993, and 1993-1994. β The Odisha Sales Tax Tribunal had earlier classified these transactions as inter-State sales under Section 3(a) of the Central Sales Tax (CST) Act, thereby subjecting them to central sales tax. β SAIL contended that these were mere stock transfers to its branches, not sales, and therefore not liable for CST. β
Source: CESTAT Delhi
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