"cst included against c form" mentioned in transit sale inv

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Pankaj (Querist)

12 January 2013 BY OVERSIGHT CLINT MENTIONED FOLLOWING IN SOME TAX-INVOICES MEANT FOR SALE IN TRNASIT U/S 6(2)
"CST INCLUDED AGAINST C FORM"
CST & FREIGHT INLCUSIVE AGAINST c FORMS"

c FORMS RECEIVED AND ISSUED AS WELL AS E-I FORMS RECEIVED AND E-II FORMS ISSUED. NONE OF THE CENTRAL FORMS ARE REJECTED

A.O DEMANDING C.S.T ON INVOICE AMOUNT CLAIMING PARTY HAS COLLECTED THE TAX FROM BUYER WHERE-AS PARTY IS CLAIMING THAT BEING TRANSIT SALE NEITHER HE HAS COLLECTED ANY CST NOR ANY TAX IS PAYABLE BY HIM AND HE IS MERELY INCLUDING CST PAID BY HIM ON CST PURCHASES IN SALE PRICE OF HIS INVOICES.

PLZ ADVICE REGARDING:
LIABILITY TO PAY TAX ?
SIMILAR CASE LAWS, JUDGEMENTS,
CASE LAWS ON REIMBUSEMENT OF CST PAID IN SUCH TRANSACTIONS

srinivasan

srinivasan (Expert)

13 January 2013 The documentation can only support your claim either in the quotation given to the party or in the ordger placed by the client either if it is stated that the sale is under 6(2)b or E1/E2 sale it can be duly supported.

The copy of endorsed consignment note / LR / RR can also add support.

One can also take a legal argument in the case of all inclusive pricing where in the invoice it is mentioned as "CST included against C Form" that in the case of 6(2)(b) sale the CST is Nil and the same has been included in the price. It can be further supported that if the buyer fails to give the C Form to the seller, then the transaction would not qualify as sale under sec.6(2) and will suffer tax under clause (a) to proviso to sec. 9(1) of the CST Act. Therefore the CST rate is NIL provided the C Form is given by the buyer.

However if the dealer had shown the CST separately in the invoice to the customer, the argument cannot hold good and he would be liable to remit it to the govt. as it would amount to unjust enrichment.

Pankaj

Pankaj (Querist)

13 January 2013 Thanks for the info but some more queries are there:

All the forms received viz. C & E - I and even E-II forms issued by the Department.

Any settled case law for similar transactions ?

"RE-IMBURSEMENT FOR CST PAID BY THE CLIENT WHILE PURCHASING GOODS CAN BE CLAIMED AS INCLUDED WHILE MENTIONING CST INCLUDED AGAINST C FORM , YES OR NO, PLZ ELABORATE