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Cst - issue of c form on cst sales

Alpesh Chandaria (Proprietor) (28 Points)

25 May 2012

If A is Supplier (e.g Indore), B is the customer of the Supplier i.e. A (Maharashtra) and C is the customer of B (Gujurat)

If on request of B (maharashtra), A (Indore) send the goods directly to C (Gujurat) and billed B as Party and Consignee address of C (Excise Bill), who will be liable to issue "C" form and to whom. Can E-I form be issued?

Also can in this case consignment sale be determined? and "C" form will be then given by C to A and B will receive the commission. please confirm

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7 Replies

Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 25 May 2012

It's an E-1 sale.

Yes, E-1 form can be issued adnd necessary C forms be given and taken.

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Harshal Fifadra (Chartered Accountant) (1489 Points)
Replied 25 May 2012

It is a clear 6(2) sale . Declarations to be issued by the following persons :

A receives C FORM from B

B receives C FORM from C

A issues E-1 FORM to B

Ok ....

Sunil Kumar G (AGM Taxation) (373 Points)
Replied 26 May 2012

Mr. Harshal point is correct. For more details of E1 sales please visit www.cstonline.in

CA CHIRAG RATAN JAIN (PRACTICING CHARTERED ACCOUNTANT ) (62 Points)
Replied 26 May 2012

wat is form E1c?

Nitil Kr. Agarwala (Persuing CS) (264 Points)
Replied 26 May 2012

Please find below the details off Sales in Transit hopefully which will solve ur queries.

A sale or purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase--

Occasions the movement of goods from one state to another.
Is effected by a transfer of documents of title to the goods during their movement from one state to another.(sales In transit)

Movement from one state to another:In above case when goods are given to carrier or transporter for transportation .the movement of goods starts at the time of delivery to carrier and terminated at the time when delivery is taken back from such transporter /carrier.

As per point two above CST is applicable if sale is done while goods movement from one state to another state.Its called E-1 transaction or sale in transit.

suppose: X situated in Delhi purchased goods from Y in Punjab .Y booked the material on transport and send GR/RR(goods receipt note issued by transporter) to X. X instead of receiving material from transport himself sold the material to Z in Delhi (same state) by endorsing RR/GR

in the name of Z.Z takes the delivery from the transporter .

In this case sale from Y to X is covered under CST and X to Z is also covered Under CST as sale in transit.

To complete the transaction X will issue C form to Y ,

Y will issue E-1 form to X

Z will issue C form to X

In the above case even X & Z both are situated in Delhi but the sale transaction is covered under "sale in transit" clause of CST act so CST will be applicable and vat is not be charged.

CST is applicable only if goods movement is from one state to other state .If goods movement is started from one state and ends in same state then CST will not be applicable.

The Point is to be noted here that starts and end so if the start and end of movement of goods is interstate then CST will be apply but if start and end both in same state then vat will be applicable .suppose goods start movement from x state and moved through y state but movement of goods ends in x state then Vat will be applicable.

Goods moved from one state to another state for export/Import transaction and branch transfer are not covered under CST.

so location of the parties and billing is not important but movement of goods is important to decide whether CST is applicable or VAT is applicable.

Now point wise answer to your queries

As explained above if goods are moved with in the state then VAT will be applicable .No Form is required.the above situation can arise only if the seller has a branch office in the purchaser state.In this vat of the Purchaser's state will be applicable.Seller can not charge their state Vat In this case.
As goods are to be moved from one state to other state so CST is applicable .No matter seller and purchaser belongs to same state.

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santosh (Accountant) (21 Points)
Replied 26 May 2012

hi any body can tell me form C , H, J, I, with example

Sunil Kumar G (AGM Taxation) (373 Points)
Replied 26 May 2012

C Form: Under section 8(1) of the Central Sales Tax Act 1956 an Interstate sale to a registered dealer can be made at the concessional rate of Central sales tax i.e. @ 2% (or less or Nil rate , if the appropriate VAT Rate on particular goods is less than 2% or exempted) existing at this time. But for claiming concessional rate of CST the seller needs to produce a declaration in the prescribed form (Form C) duly filled and signed by the registered dealer obtained from a Commercial Tax Department.

Form H: The provisions of sub-section (3) of Section 5 shall not apply to any sale or purchase of goods unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed authority. The Exporter who exports the goods which he has purchased from other dealer has to submit Form H to the dealer supplying the goods. Form H has to be submitted to the first Assessing Authority at the time of assessment.

EI Sales: Section 6(2) of CST Act gives exemption to subsequent interstate sale effected by transfer of documents of title to goods when the goods are in movement from one state to another. However such exemption to subsequent inter-state sale is subject to production of Form E-I, as obtained from prior vendor and ‘C’ form from buyer.

For More information please visit our website www.cstonline.inhttps://www.cstonline.in