• Sep
  • 12
  • 2010

Some issues pertaining to C forms under CST ACT 1956

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Under CST Act 1956 there are lot of Forms and declarations which help in saving CST on the interstate transactions. C form is an important and foremost common among dealers registered under CST Act 1956 engaged in interstate sales or purchases.

Although the CST Act 1956 is on the verge of its end with the advent of GST knocking at the doors, waiting to change the whole picture of indirect taxation in India. But still I feel its worth to discuss some issues relating to C forms under CST Act as lot of Assessments are pending under VAT and CST Acts and many dealers are facing problems in getting and producing the C forms for finalization of their assessments. Some important issues relating to the C forms are discussed as below for the benefit of dealers all around India:

What is C form: As per section 8(1) (b) of CST Act 1956 sales tax on interstate sales is 2% or state rate whichever is lower, if the sale is to a registered dealer and goods are covered in the registration certificate of the purchasing dealer. Otherwise the tax applicable is the state rate applicable on the goods sold.

If the selling dealer pays CST @ 2% i.e @ concessional rate then he has to produce proof to his sales tax assessing authorities that the purchasing dealer is eligible to get these goods at concessional rate. Otherwise the selling dealer will be asked to pay balance tax payable plus penalty as applicable. Therefore section 8(4)(a) provides that concessional rate is applicable only if purchasing dealer submits a declaration in prescribed form C.

Where from to get the C forms: The blank C forms are issued by the sales tax authorities to the purchasing dealer who has made interstate purchases on concessional rate of CST.  A dealer is entitled to obtain blank C forms from the sales tax authorities. If the registration is wrong, authorities can amend or cancel the same. However, as long as his registration is in force, blank C forms must be issued to him- Colourgraphs v. STO-(1993) 88 STC 347 (Ker HC).

Similarly it was held in Quality Enterprises v. ADCTO(2002) 127 STC 504 (Mad HC) that issue of blank C forms cannot be denied on the ground that transaction of dealer is taxable only as local purchases. Once a dealer pays necessary charges for C forms, the blank C forms must be issued. If he misuses C forms, he is liable to penalties contemplated in the Act.

However the CST rules may provide for  non issue of  blank C forms to a defaulting dealer in which case no blank forms may be issued. Similar rule was upheld as valid in S.N.E (India) P Ltd v. CST (2003) 131 STC 417 (Del HC DB).

Number of Transactions per C forms: One declaration in C form can cover all transactions in one quarter, irrespective of total amount/value of transactions during the quarter. (Quarter means period of three months). If a transaction covers more than one quarter, separate C form is required to be issued for each quarter.

Original, Duplicate and Counterfoil copy of C forms: The C form has been prescribed in three parts Original, Duplicate and Counterfoil. All three parts are identical in contents.
Section 8(4) of and Rule 12(1) do not specify which part of C form should be produced before the assessing authority.

Hence, in Manganese Ore (India)Ltd. v. CST MP (1991)TC (MP HC DB), it has been held that filing of copy marked Duplicate is enough compliance of the law and concessional sales tax rate will be available even if copy marked Original is not produced.

However, if CST rules as amended by states require submission of original copy, then only that copy will have to be submitted.

Therefore one need to check the relevant CST state rules if any, amended to this effect before furnishing the duplicate copy of C form.

If the buyer sends both the copies of C form marked as Original and Duplicate to seller and if both are lost, then the following procedure should be followed:

If duly completed C form is lost when it was in the custody of purchasing dealer or when the form was in transit to selling dealer, the purchasing dealer will have to furnish Indemnity Bond to sales tax authorities from whom the blank C form was obtained. If the duly completed C form is lost by the seller, then he has to submit indemnity bond to sales tax authorities of his state. The prescribed form of Indemnity bond is in Form G.

If C form is lost(both original and Duplicate copies), the purchasing dealer can issue duplicate declaration in C form with clear declaration in red ink that this is a duplicate declaration being submitted. Details of earlier lost certificate number and of selling dealer has to be given.

It may be noted that there is no provision to submit certified Xerox copy of earlier certificate and Xerox copy is not acceptable- J N Jetiwa v. state of Maharashtra- (1995) 11 MTJ 491 (Mah Trib).

Selling dealer is not liable for false declaration by buyer: The purchasing dealer can issue C form for purchase of only those goods which are mentioned in his registration certificate, for other goods no C form can be issued by the buyer, if the buyer so issues C form for goods not mentioned in his R.C. then it will be misuse of C form and the penalty can be imposed on buyer.

But the selling dealer has only the obligation to satisfy himself that the purchasing dealer is a registered dealer for this he can rely upon the representation made by the buyer in the C form. If the purchaser misapplies the goods, the penalty can be imposed on the buyer, but selling dealer, who has relied upon C form issued to him, cannot be held liable.

Selling dealer is not required to hold an enquiry with regard to purpose for which the materials have been purchased by purchasing dealer. Once he furnishes necessary declaration forms from purchasing dealer, nothing more is required to be done.- K G Industries v. STO (1999) 113 STC 49 (MP HC).

Duly filled C form should be issued to seller: Sometimes, C form is obtained in advance and particulars of invoice etc. are filled in later. This is not legally correct, as section 8(4)(a) uses the words ‘to whom goods are sold’. Thus, duly completed C form should be obtained only after sale. Otherwise C form can be rejected.- Salem Magnesite v. State of Tamil Nadu (1999) 116 STC 110 (Mad HC DB)

Issue/receipt of C form against goods used in works contract: Goods used in executing works contract are deemed to be sold and there is sale of material used in the execution of works contract. Hence C form can be issued for materials used in works contract, if the goods are included in the registration certificate of the dealer- United Ltd. v. CTO (1991) 83 STC 207(AP HC)

No C form for rejected goods: It was held in Lakshmi and co. v. State of Kerala ( 2001) 121 STC 423 (Ker HC DB) F form can be issued only in case of completed transactions and not in case of rejection goods. Decision in this case of F forms should also be applicable on C forms. The reason is if goods are rejected, buyer cannot issue a certificate that the goods are for manufacture or for resale.

Declaration in C form cannot be rejected for minor defects: In Rajsthan Pipes v. CTO (2004) 138 STC 383 (Cal HC), it was held that benefit cannot be denied on ground of omission like date of registration and minor variation in amount.

The authorities should allow rectification of defects in declarations: If there are minor defects in the C form submitted (e.g. challan no., date etc. not mentioned, or name of dealer is mis-spelt), the officer should give reasonable opportunity to the dealer to remove the defects- Anil Kumar Dutta v. Addl Member (1967) 20 STC 528 (Cal)

In State of Orrisa v. Orissa Polish Works (1970) 26 STC 480 (Ori HC), it was held that C form should be returned to the selling dealer for rectification. Selling dealer should be allowed reasonable opportunity for this purpose.

When to submit the C form with the authorities by the seller: As per rule 12(7) C form can be submitted to the assessing authority within three months after the end of period to which it relates. STO can allow further time for submission of the form, if there is sufficient cause for not submitting the form in time.

C form can be submitted even at appellate stage if sufficient cause shown: I have already earlier written an article on this topic referring the judgement of Punjab and Haryana High court in R S Cotton Mills v. State of Punjab wherein it was decided that C or D forms could be filled even after the filling of the return or at the appellate stage and same could be taken cognizance of.

Hence the C forms can be submitted even after the filling of annual statement i.e. at the time of assessment or afterwards and the same can be taken cognizance of since no loss is caused to the revenue by not filling the C forms along with annual statement.
C forms generally should be submitted before the first assessing authority. After the assessment, appellate authority can allow submission of C forms if sufficient cause is shown for not submitting the C form before the assessing authority. This is because the appellate authority has powers of reassessment. Appeal in taxation matters is different from power of appellate court in civil matters. The appellate authority is in nature of revising authority. He can revise every process which led to the ultimate computation or assessment- State of AP v Hyderabad Asbestos Cement Products 94 STC 410.

It is advisable that the dealer should maintain proper record of follow up and efforts made with buyer to obtain C forms to prove that he made all possible attempts to obtain C forms within time. In such case it will help proving the sufficient cause for not submitting the C form within time and appellate authority will accept the C forms at appellate stage if obtained after assessment.

If sufficient cause is shown for late submission of C forms, the assessment can be reopened as it was held in Dtate of Tamilnadu v. Arulmurugan and co.- (1982) 51 STC 381(Mad HC DB)

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(Author – Amit Bajaj Advocate, Bajaj & Bajaj Advocates, 128, Sangam complex, Milap chowk, Jalandhar City (Punjab), Email: amit@amitbajajadvocate.com, M +919815243335)

53 Responses to “Some issues pertaining to C forms under CST ACT 1956”

  1. shailendra mehta says:

    I want to issue c from for purchased from Maharasthra & i working in MP

  2. ASHOK KUMAR says:

    Dear sir,
    Can a purchaser deny C form as they have not received reminder from the seller. Is reminder is mandatory for issuing C form by the pruchaser. If so what is the time limit for sending reminder.
    regards

  3. Bhavana says:

    Can we issue c form for goods delivered in state other than state of registration. Can we have cst registration in multiple states.

  4. NAYAN says:

    if c form not recieved for the year 2010-11 what is tax & interest & penlty liabilties as on today as per cst act

    we are in gujarat under vat act.

  5. sunil says:

    G.A.M.E.

    Essar Steel should issue form C according to invoice date of the supplier.

    Sunil Sharma
    Tax Consultant
    Essar Power M.P.Limted

  6. RAJENDRAN says:

    Dear Sir,
    We issue Original manual C form in before six month to kerala state this Original C form which is misplaced by our supplier is there any case law in Tamilnadu in this regards. Can assessing authority in Kerala will accept Duplicate Copy of C form in place of Original Please guide in the matter with case law?

    With best regards

    Rajendran

  7. R ANIL KUMAR says:

    sir,

    certain C- form for the year 2008-2009 was lossed from me which was iisued from maharastra. what is the next proceeding to submit duplicate forms in kerala commecial tax department. please give replay at the earlist

    Thanking You

    Anil Kumar

  8. shiva says:

    how to issue c form before 2014 transaction

  9. Amit Kumar says:

    Rajendra Nair Please specify the state from you want C forms

  10. Amit Kumar says:

    Gaurav Bindal @ Uttar Pradesh to Maharashtra

  11. Amit Kumar says:

    Dharmik Parik@ If you are registered under CST Act then there is an obligation to file CST Return also even there is no transactions of Sales & Purchases. But in your case you purchased goods from outside the Maharashtra against Form C . Then you need to file CST also. For more information Please contact below mail id amit_mittal509@yahoo.com

  12. Amit Kumar says:

    G A M E @ There is provision in Rule 12 of CST Act to obtain separate Forms for transit transactions. Now a days in online issuance of C forms facility there is option to generate separate c from for transit transactions.

  13. Amit Kumar says:

    Mahesh Birader @ Please specify the state Name .

  14. Amit Kumar says:

    NK Harish @ If your product is exempt then there is no need collect any C forms.

  15. Amit Kumar says:

    Vishal@ You can issue C from Karnataka. More information please contact below mail id amit_mittal509@yahoo.com

  16. Amit Kumar says:

    Malik@ You can Issue C form against DEPB License because License is covered in the definition of sale and goods. Further this is used for purpose of manufacturing activities.

  17. Subhankar Mandal (ICWAI Inter) says:

    Dear Sir/ Madam,

    I Have one query, if a party doesn’t issue C Forms for last quarter, and he surrender the CST Registration, but his VAT TIN Registration is active, and also he doesn’t have that much of money to pay the rest local tax, then what should the Seller do, so that it doesn’t effect his company or firm ?, Sir/ Madam it will be very much helpful if you kindly give us a Solution.

  18. Mallik says:

    dear sir,

    for purchase of DEPB licences from outside gujarat & party charged 2% cst aginst form ‘C’.
    Can we issue ‘C’ form against DEPB Licence purchase.

  19. Thilaga says:

    Dear Sir / Madam,

    Our X staff is not uploading AnnexureIA for 2012-13 3rd quarter. So we did not generated online Form C. In this problem how we get Form C from CTO, kindly advise.

  20. G.A.M.E. says:

    We have sale the materials to ESSAR Steel Limited, Hazira, our bill dated 27.03.2009. Party issued the “C” form against this Bill in 1st quarter of 2010-11. Our sales tax department disallowed the “C” form.

    Please give if there is any notification or rules?

  21. sachin chavan says:

    Dear Sir,

    Please if any company want to collect their pending
    C Form. We will help them to collect their pending C Form you have to just call us on our phone no 8108803100 or mail us consultantwic@outlook.com/ blackfoxphoto@yahoo.com

    regards
    sachin chavan
    consultantwic@outlook.com 8108803100

  22. Vishal says:

    Dear Sir,

    Required your help in below Issue.

    We received material from Maha under CST Sale for the Q3 2012-13.

    We have to issue C form form Karnataka but we are not mention in return also & revise return also. can Karnataka Govt can issue C forms.

    Can you please guide us how can we get the C forms.

  23. Mahesh Biradar says:

    Dear sir,
    we have submitted our vat returns for the month April-2013 and now this can not be revised.In this vat return we have entered “without C form Column” option instead of selecting “With C form” option for the interstate purchase.But now we are not able take out the C forms………plz help us.

  24. NK Harish says:

    In Tamil Nadu our product is exempted from CST and VAT, hence when we make a inter-state sales (CST sale), do we still need to collect the “C” Forms? Please clarify.

  25. dharmin parikh says:

    Dear Sir/Madam,

    We are facing a problem regarding c-form. We have applied for c-form long time back and we received a mail from the department that CST return of 2012-2013 is not filed and hence the c-form application was not accepted. But we just purchase goods from out of Maharashtra and do not sale goods out of Maharashtra so there is no question of filing CST return. We have never filed CST return till date so why we should filed it now? please help me in solving this matter as soon as possible.

  26. preetpal singh says:

    Is it mandatory that c forms are issued against form 38 as my goods come from railways

  27. S. N. ENDAIT says:

    The C forms submitted by our Purchaser against the goods sold during 2006-07 are lost by us. We have comply the procedure to obtain the duplicate C forms. one of the Party agree to submit the duplicate C form but one party is not co-operate in this matter.Can we directly approach to the Tax Authority of M.P. State ? any case law in this regards for gating releaf to us if we do not received the duplicate C forms ? please guide us.

  28. jai sheth says:

    Dear sir,
    this is regarding the year 2006-07
    I have recently received the C form from my party for the year 2006-07
    but the Sales tax department is not accepting the same on grounds that hand written C forms are not acceptable and E C forms are mandatory from the year 2006-07. is that right?cant they accpet the hand written C form which the party has given us….?kindly suggest

  29. Manash says:

    Is C Form application can rejected by assessing officer

  30. D.K.SAXENA says:

    Dear Sir / Madam,

    We sold the goods agt cst. we have received back the said googs after six month. In which year we could made sale, we received complete form”C. but next f.y. they returned the rejected goods & issue the form”C’ after deducting the rejected goods value. Is it correct? As we have not shown pur. retun in our books because goods received after six month. we have issue credit note Discarded Debit.Party credit.

    Now we have recd shory from “C” pls advice.

    Thanks & Rgds
    D.K.Saxena
    09258067040

  31. Pravin Shelke says:

    Dear Sir,
    Can we produce Duplicate copy of C form in place of Original C form which is misplaced is there any case law in Maharashtra in this regards. Can assessing authority in Maharashtra will accept Duplicate Copy of C form in place of Original Please guide in the matter with case law ?

    with best regards

    Pravin Shelke

  32. Dayal Singh Gusain says:

    Some one has to issued C-form to us 3rd qtr. of (08-09) and 1st Qtr of (09-10) together is the form is valid for both year party has tiold me the materials has been received physically begning of 1st qtr.

  33. MANAS says:

    DearSir,
    we have already completed our assessment till 09-10. now one of our vendor require c form for the year 2006-07. can it possible to issue c form after the assessment.

    regards,
    Manas
    9012803743

  34. SANGHAVI says:

    please guide our party office is fire all documents are fired party is not issued
    any cform he was issued only police nc copy,fire brigade report,it is ok for sales tax dept.

  35. Gaurav Bindal says:

    Dear Sir,
    In case the seller (Maharashtra) have mentioned in the invoice :
    Billed to : Party (Buyer) Bihar
    Consigned to : Party (Consignee) Uttar Pradesh

    then who is liable to issue the C-Form and to whom?
    please help in the following regard.

  36. R S SAPTARSHI says:

    We need a clarification that in the event that BUYER confirms in Purchase Order but does not issue Form “C” later on then what relief is there to SELLER as Government charges penalties and interest amounts to SELLER in case relevant “C” Form is not submitted which actually is not issued by the BUYER.

    Sale of goods against Form “C” as per Purchase Order issued by BUYER and these are not individuals but Private Limited and Limited Companies who do not issue “C” Forms to SELLER.

    Please clarify.

  37. Thirumala Ram says:

    Dear Sir,

    We are dealing pharma raw materials which is taxable at 5% under vat 2% with form C. In our product we are dealing Pharma Sugar which is exempted from Vat and same will selling to our Registered Cst dealers for which some our customer issuing Form C to us along with taxable 2% also. In Tamilnadu commercial tax department if the form C received by us from our customer for Exempted Sales (Pharma Grade Sugar) department taxed at 5% whether it is correct or not please explain

  38. Rajendra nair says:

    R/Sir.
    I can’t issue some c form for the year 2008-09 to party.(Pending)
    How i can release c form from online for above period

  39. Anil says:

    Dear Sir,
    If form C (haryana Sale Tax)filling incorrected how can it correceted ?

  40. Sanjib says:

    ear Sir/Madam,

    We are registered dealer & we are dealing in medicine/cosmetics
    goods.

    We have some branches in other states from there we are getting
    Free Medical Samples/Literatures/Memo Pads etc. through “Stocks
    Transfer Note” with rate Rs. 0.00 (Zero Value for full consign)
    and not required to issue any Forms (F)to them against the such
    transactions.

    Is there required Form T-2 along with the shipment ?

    Kindly advise on this at the earliest please.

    With Thanks & Regards,

    Sanjib Kumar

  41. Mahendra Joshi says:

    We have supplied material from udaipur bill dated 30.12.2008 material received in delhi premises on 03.01.2009. We have accounted sale in december08 (3rd qtr.). Our purchaser issued c form in 4th quarter.sales tax auditors reject this bill and creat demand.it is accaptable or not.
    Pl. give if there is any notification or rules?

  42. Harpreet SIngh says:

    Can an item be billed against c-form issued from one state but the consignee address be in another state.

  43. TUSHAR DOSHI says:

    In state of Maharashtra

    I have misplaced the original C Form for the fiancial year 2008-09. However the dupicate copy of the said C Forms are available with me. Are duplicate C Form valid for assessment proceedings. Are there any case law relatiing to this topic. i don’t want to go for long process of FIR and press note

  44. Dayal Singh Gusain says:

    Respected Sir,

    I want to know about the c-form we had made sales on 26 Marc of last quarter of financial year (2008-2009), but the purchasing dealer issue me c-form in 1st quarter of financial year (2009-2011) why this c-form is valide.

  45. DVS Satyanarayana says:

    is there any penalty/interest payable on differential tax when non receipt of C forms from the buyer?

    In our case we have been following up for C form from one of our customers for the last one year but we could not get in. So now we decided to pay the differential tax.

  46. sreenivas says:

    Dear snehangsu choudhury,
    You have to pay full tax amount as per tax rate

  47. sreenivas says:

    Dear Latha Medam,
    You can write the C-form no on Invoice copy and can produce that to claim the C-Form.
    You had not mentioned Invoice copy date, From 2005 onwards TIN and CST both numbers are same

  48. snehangsu choudhury says:

    Sir,
    my party, in Bengal sells goods at Andrapradesh . After sevral reminder the buyer party has not issued any form. What to do in this case at appelate stage.

  49. nikunj mathur says:

    i have received of orginal C form but losset of c form assessment 2008/09 earing zerox copy of c form is allowed earing leftest judgment copy send

  50. Prakash Shah says:

    We have purchased material from Hyderabad bill dated 26.06.2012 material received in our premises on 03.07.2012. We have accounted purchase in July 12 (2nd qtr.). Our supplier asked for C form requred in 1st Qtr. How can we issue Form C in 1st Qtr.
    Pl. give if there is any notification or rules?

  51. vikas oil ind.junagadh(gujarat) says:

    i have received of orginal C form but losset of c form assessment 2008/09 earing zerox copy of c form is allowed earing leftest judgment copy send

  52. G.Dwarakanath says:

    This is regarding enquiry about C form/E1 sales under 6(2) of MP CST act. Some dealers are asking to send the E1 to the Party as we are first seller then only they will issue C forms. Kindly explain the procedure regarding the same.

  53. latha says:

    please clarify my dought please sir,

    in delhi, hyd, bangalore tin no impliment on 2005 thecustomer given C’FORM NOT mentioning CST nubmer , thay mentioning TIN nubmeronly .OUR sales officer rejecting the C’FORM because NO CST number. please reply us which is correct.

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