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What is C Form?

Akanksha (CA) (126 Points)

27 April 2009

Applicability of C Form in the VAT scenario.

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62 Replies

CA. Dashrath Maheshwari (TaXpert) (15075 Points)
Replied 27 April 2009

Form C is issued by a registered dealer(purchaser) of goods to the seller of goods in case of interstate sales. When sale is made by a registered seller of one state to a registered dealer of another state, CST is chargeable 2 @ % provided the registered dealer(purchaser) has provided CST to the registered seller. In the absence of C form, CST will be leviable at the rate applicable in the seller's state. In such a case there will be a rise in price, as a purchaser is not entitled to set off CST paid on purchases.

Thus C Form plays an important part in avoiding double taxation as well.

9 Like

CA SUDHIR HALAKHANDI (PRACTICING CHARTERED ACCOUNTANT) (12406 Points)
Replied 27 April 2009

The rate of tax on interstate sales is governed by Central Sales tax Act and if the sale is made to a registered dealer of another state then the rate of tax is 2% but the registered dealer (i.e. ) the purchaser have to supply C-form to the seller. The rate of tax without C-form in case of interstate trade or commerce is equal to the rate of tax applicable in the state of the seller. In fact, C-form is proof that the sales are made to a registered dealer of another state.- CA Sudhir Halakhandi

24 Like

Akanksha (CA) (126 Points)
Replied 28 April 2009

thanks sir..................thanks a lot 2 both of u........

2 Like

R B Banwat (tax consultant) (154 Points)
Replied 29 April 2009

1. The concept of C form is very simple. When Goods are moving from one state to another state, CST comes into play. Generally Goods move from one state to another state, generally they are either of Resale and/or for use in manufacturing of Goods.

2. When such goods are purchased either for resale and /or for use in manufacture, State Government collects the tax when goods are resold or when manufacturing goods are ultimetaly sold. Thus Govt gets that tax on final selling price.

3. In such case when goods are moved from one state to another if full tax is paid by purchaser to Seller, then there will price rise, as purchaser is not entitled for SETOFF of CST paid on purchases.

4. To avoid this double taxation C Form plays importnat part. When one Registered Delar purchase goods from another registered Dealer, they can use C form , and then selling dealer will charge CST at reduced rate ( Section 8(2) of CST ACt

There is lot more things about C form, but i think u are interested in general principles.

so thats enough for the pen

15 Like

Yugal Kishore Mishra (Accountant) (21 Points)
Replied 07 January 2011

IF THE REGISTERED PUCHASER NOT SUBMIT THE "C" FORM WHAT TAX RATE WILL BE APPLICABLE

U S Sharma (glidor@gmail.com) (21041 Points)
Replied 07 January 2011

1. C form is a form supplied by a registered dealer (purchaser having CST registration) to a registered seller in case of an inter-state sale.

2. When C form is issued by a registered dealer, CST is chargeable at a concessional rate of 2%.

3. In the absence of C Form, CST is leviable at a rate applicable in the seller's state.

4. C Form plays an important part in avoiding double taxation.

vivek garg (Chartered Accountant) (51 Points)
Replied 09 February 2011

Please suggest the consequences on non-submission of form C to tax deptt i.e. how much interest & penaly is applicable?

U S Sharma (glidor@gmail.com) (21041 Points)
Replied 09 February 2011

in case the seller fails to obtain C forms from interstate buyers, the sale is treated @ maximum vat chargable in state, and short fall with interest is to be paid by the dealer ( seller)

3 Like

Sathya Sankeerth K N (Chartered Accountant) (429 Points)
Replied 05 May 2011

Thanks to every person who posted answer for the same..................

3 Like

Shrikant Sanjayrao Mirjapure (Accountant) (21 Points)
Replied 29 July 2011

DEAR SIR,

AT THE TIME OF SELLING GOODS TO ANY GOVT. DEPARTMENT THAT TIME TAX IS NOT APLICABLE. (MEANSE RATE OF GOODS IS INCLUDING TAX)

IS IT RIGHT ?

Nitin Srivastava (Director) (32 Points)
Replied 31 July 2011

Can I issue C Form while I am in Lumpsum tax rate of 2% (Composition) in Works Contract

CA RICHA BADALIA (CA,CS) (1677 Points)
Replied 26 August 2011

In the case of Inter state trade or commerce, registered dealer can get goods at concessional rate of CST, if he produces a declaration in Form C to the selling dealer.

The Registered purchasing dealer can get blank form C from the Sales tax authorities of the state in which he is actually registered.

Contents of Form C---------

Form C contains particulars like name of issuing state, date of issue, name of purchasing dealer, to whom Form C is issued, his R.C.No., date from which R.C is valid, name and address of the seller with name of the state, details of the goods ordered and obtained. It bears seal of the Sales tax authority issuing the form.

Form C is issued by the purchasing dealer to the selling dealer who shall submit to the sales tax assessing authority.

A single Form C is sufficient to cover all transaction of sale which take place in one financial year between the same two dealers.

9 Like

ANIL SULEGAI PREMANATH (ACCOUNTANT) (247 Points)
Replied 26 August 2011

... But depends upon the state too.

for eg., In Karnataka you cannot issue a single C form for the whole Year. You need to apply for c form for every quarter for every dealer. And in karnataka you have to apply C form online and no blank c form is issued seperately from the VAT office.

Thanks!!!