Sale of Tailored products in a store dealing exclusively with Handloom Products

I deal in handloom products where i don't sell any tailored merchandise. My friend however has requested me to keep some of her start-up's promotional t-shirts in my store. though they are meant for promotional purpose she intends to sell it below the Cost price at a token sum. I presently don't have to pay any sales tax on handloom products, but I'm worried that if I keep such promotional t-shirts which are being "sold" at "token price" , it might get me under the sales tax department radar. Can you please clarify this?

Asked on March 18, 2014 in indian law.
Add Comment
1 Answer(s)

Sir, sales tax is a retail point of purchase tax imposed by state and local governments that is paid
by the purchaser of the goods. In the present case you are merely facilitating the sale and are not
thereby earning revenue through the act of sale. In such a case your friend shall be liable to pay sales
tax and not you. This is because you are carrying out the job of promoting sales. Thus you shall not
be required by law to pay sales tax.

Answered on November 6, 2017.
Add Comment

Your Answer

By posting your answer, you agree to the privacy policy and terms of service.