Tax Consultant
1064 Points
Joined August 2008
Hi Akanksha.
C FORM is issued by the purchaser of goods to the seller when goods are purchased from Outside the State in which purchaser carries on business. C Form is a form under the Central Sales Tax. It is given by the purchaser to the seller so that the seller will charge a lesser rate of VAT to the purchaser (upto 31-03-2009 is was 2%). If the purchaser fails to submit C Form to the seller, the seller is supposed to charge VAT at the rate prevailing in his / her respective state.
Take an Example:
A in Ahmedabad purchases goods from B in Bangalore. Normal rate of VAT in Bangalore (Karnataka) is say 12.50%. But if A submits C Form to B (i.e. goods are purchased against C Form), B shall charge ONLY 2% CST instead of 12.50%)