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C form agaisnt e1 sales

arun kumar (accountant) (67 Points)

01 June 2013

Dear all,

I am purchased goods, from a local party who is a trader. He subsequently purchases the goods from a Mumabi based party with CST. When local party issues me a bill, he does not charge the CST and we alsot received the bill from mumbai party with CST but we done payment to local party.

i know this is E1 sales. but problem is we issued C Form to mumabi party istead of local party because mumbai party not mentioned local party name in bill. Now local party asking C form. can you please help me, how to solve this problem.

Thanking You

Arunkumar

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6 Replies

Anupam( Upcoming CMA) (Internal Audit Executive at Frankfinn Institute of Air Hostess Training) (302 Points)
Replied 01 June 2013

do they have mentioned your name in the bill issued by them?

SANKAR MAJUMDAR (COST ACCOUNTANT) (111 Points)
Replied 06 June 2013

To treat the transaction strictly as a Sale in Transit (E-1 sale), Mumbai dealer should have raised the invoice with 2% CST on the trader from whom you have purchased and the local trader should have raised the bill on you without charging any CST. If the local party subsequently buys the material from Mumbai dealer after effecting the sale to you, that is absolutely not a Sale in Transit. Moreover, if the transaction is to be a E-1 sale, how can Mumbai party directly raise the bill on you. If you have issued the C form to Mumbai dealer, the transaction does not have any semblance of Sale in Transit.

arun kumar (accountant) (67 Points)
Replied 06 June 2013

can you tell me solution for the above entry.

SANKAR MAJUMDAR (COST ACCOUNTANT) (111 Points)
Replied 06 June 2013

If possible, pls do the following :

1. Ask the Mumbai party to raise the bill on local party or revise the bill raised on you billing the same on local trader prior to a date on which the sale took place between you and the local party.

2. Ask the Mumbai party to return the C form to you.

3. Issue another C form to the local party.

I can understand the above is almost impossible, but apart from that I do no find any solution.

AKSHAY R SHET (FINANCE) (48 Points)
Replied 05 August 2015

if first party of goa , second party of bangalore and third party of bangalore. what forms and who has to issue. can third paty issue c form to second party as both are in same state

B.N.Dharmendra (Senior Manager Indirect Taxation) (136 Points)
Replied 14 August 2015

Buyer and Trader can be at same State, For E1 Transaction the Goods should move interestate i.e. from the manufacturer and the LR should be endorsed to Buyer by the Trader. It Sale transaction can be predetermined that is not an issue. LR and Invoice documentation is important.

The flow will be like this :

Mfr will issue E1Form to Trader

Trader will issue C Form to Mfr

Trader will received C Form from Buyer

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