3. When is a sale or purchase of goods said to take place in the
course of inter- State trade or commerce
A Sale or purchase of goods shall be deemed to take place in the
course of inter-state trade of commerce if the sale or purchase-
(a) occasions the movement of goods from one State to
another or
(b) is effected by a transfer of documents of title to the goods
during their movement from one State to another.
Explanation 1 : Where goods are delivered to a carrier or other bailee for
transmission, the movement of the goods shall, for the purposes of clause
(b), be deemed to commence at the time of such delivery and terminate
at the time when delivery is taken from such carrier or bailee.
Explanation 2: Where the movement of goods commences and
terminates in the same State it shall not be deemed to be a movement of
goods from one State to another by reason merely of the fact that in the
course of such movement the goods pass through the territory of any
other State.
4. When is a sale or purchase of goods said to take place outside a
State
(1) subject to the provisions contained in section 3, when a sale or
purchase of goods is determined in accordance with sub-section (2) to
take place inside a state such sale or purchase shall be deemed to have
taken place out side all other states.
(2) A sale or purchase of goods shall be deemed to take place inside a
state if the goods are within the State …
(a) in the case of specific or ascertained goods at the time the contract
of sale is need and
(b) in the case of unascertained or future goods at the time of where
appropriation to the contract of sale by the seller or by the buyer whether
assent of the other party is prior or subsequent to such appropriation
Explanation : where there is a single contract of sale or purchase of
goods situated at more places than one, the provisions of this subsection
shall apply as if there were separate contracts in respect of the goods at
each of such places.
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 good 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) Not withstanding 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.]
1. Inserted by Act 103/1976 w.e.f. 1-4-1976.