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C-Forms

Manju (Accountant) (47 Points)

29 November 2007

Do we have to issue C-Forms even if the CST rate applicable is 0%. Do we have any special provisions concerning this in Union Territories.

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8 Replies

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 29 November 2007

C forms are manadatory only for concessional rate of taxes on purchases in course of inter state trade & commerce. So in your case, if the goods are exempted from sales taxes, C form is not required.

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Shyam Lal Naik (Service) (6158 Points)
Replied 29 November 2007

Will depend on the respective law of the UT. In some UTs like Dadra & Nagar Haveli, some units are granted tax exemption subject to the condition that the sales are to registered dealers. In this case, if you are buying goods from such units, you have to issue C form. Here the CST rate is not zero, but exempt.

Dayal (Gen. Manager - Indirect Taxation) (3451 Points)
Replied 29 November 2007

Yes. even if it is 0% still CST C form has to be issued. the exemption is by way of a notification which does not change the provisions of the act You have to issue c form as the purchase is agianst form C

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 30 November 2007

Issuance of C form is regulated by section 8(4) of the CST Act. Which says that:- "The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner- (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or (b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government:] [Provided that the declaration referred to in clause (a) is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.] Thus it is clear that issue of C form is required only if the dealers want to avail concessional rates of tax as per Section 8(1). In this case, as the tax rate is 0% (I assume the question is related to exempoted items), no quetion of any further concessional rates arises. C form or no C form. rate of tax will be Nil, so what is the use and where is the requirement of issuing C form?