How 'c' form exactly works?

C Form is a method by which you can reduce you liability of Central Sales Tax. Under normal cases you would procure goods at a CST rate which is equal to VAT rate of the particular state from were you purchased the goods (normally around 12%). But with a CForm you can purchase the goods @ 2% CST. You can issue a C Form to your vendor only if you have purchased goods at 2% CST.

First you show your total CST purchases for the month in your VAT return. Then show your purchases with or with out Cform in the CST return. When you submit your CST return, the Sales Tax Dept. automatically sends you the C Form for purchase amt. mentioned by you against C Form. C Forms are issued by the dept. at the end of every quarter & only 1 C Form is issued to 1 vendor for a particular quarter.

First of all you must have Central Sales Tax number.
Now if you purchase from out side Delhi you have to issue C form to the parties who has sold material to you.
Contact your sales tax office, give them copies of invoices of the parties from whom you have purchased, photo copies of documents of Transports, either by truck or by rail, Photo copies of Octroi receipts, and the officer in charge in the Sales Tax Department will issue C form. As a matter of fact you must ask your C.A. to handle the work.

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If i have buyed good out of state , then i have to pay excise duty and c form tax on x factory price 

Or only i have to pay c form tax on x factory price