Form E-1 with regard to VAT

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Satendra (Querist)

28 November 2008 Can any body tell me about Form E-1 with regard to VAT? Purpose of the from and who is liable to pay VAT against E-Form. Thnaks in advance

Ram Avtar Singh

Ram Avtar Singh (Expert)

28 November 2008 E-1 Form in Central sale applicable

Declarations in E-I and E-II form - As per section 6(2) of CST Act, first Inter State sale is taxable. Subsequent sale during movement of goods by transfer of documents is exempt from tax, if the subsequent sale is to Government or a registered dealer. This is subject to condition that such subsequent seller obtains declaration (a) from the selling dealer i.e. from registered dealer from whom goods were purchased. (b) from purchaser a declaration in C form or declaration in D form. The selling dealer has to make declaration in E-I form if it is a first sale and in E-II form if it is a subsequent sale. One example will clarify the requirements. Assume that W despatches goods from Karnataka to Orissa and raises invoice on X in Madhya Pradesh, W charges 4% CST and pays the same in Karnataka. During movement of goods, X sells goods to Y in West Bengal and Y ultimately sells goods to Z in Orissa. Z takes delivery of goods and the ‘movement of goods’ comes to end. Sale from X to Y and Y to Z is by transfer of documents. In this case, W will receive declaration in ‘C’ form from X and will issue declaration in ‘E-I’ form to X. Later, X will issue declaration in ‘E-II’ form to Y and receive declaration in C form from Y. Finally, Y will issue declaration in E-II form to Z and will receive declaration in ‘C’ form from Z, which will complete the chain. If the chain is broken, CST will be payable again.

Some provisions of C form applicable to E-I/E-II forms - Following provisions of C form are also applicable in respect of E-I/E-II form (a) One declaration for all transactions in one year (b) Separate declaration for each financial year (c) Indemnity bond if form is lost (d) Issue of duplicate form (e) Submission at any time before assessment (f) Like C form, the E-I/E-II forms are mandatory and sales tax concession is not available if the required form is not submitted.

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