Many a times I have received a query from different parts of the country that what is the crucial date of sale to be taken while issuing of C forms under CST Act, 1956 i.e whether date of invoice or the date on which goods are received by the purchasing dealer?

C form is a form for the concessional rate of CST on the inter-state sale of goods and is issued by purchasing dealer in one State to the selling dealer in another State for the inter-state sales transactions done during the period of three months i.e a quarter. 

Crucial date of sale becomes more so important when sale invoice in inter-state transaction is issued on the last date of quarter but the goods are actually received by the purchaser in the next quarter.

The ussual practice among all the dealers is that seller books his sale in his books of account on the date when invoice is issued, whereas, the purchaser books same purchase of goods in his books of account on the date when he actually receives such goods.

In such case it is obvious for the purchaser to issue C form according to the date on which he received the goods as on such date he enters such purchase into his books of account.

For example if ‘A’ in Delhi issues a sale invoice and dispatches goods to ‘B’ in Punjab on 31st March and books his sale on 31st March itself, but B receives the same goods on 1st April and books his purchase on 1st April, then in such case B will issue C form for such purchase in the quarter April-June (more so in such States where ‘C’ forms are generated online according to the returns uploaded), whereas ‘A’ would require C form of the same transaction in the quarter Jan-March.

In such cases the question is what is the correct date of inter-state sale for the purpose of issuance of C form. The simple answer to this question is that C form is to be issued after the sale transaction is completed. Sale of goods gets completed when transfer of property in goods takes place.

Section 19 of the Sale of Goods Act provides: “Where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.”

Therefore the crucial date for the issuance of C form will be the date on which transfer of property in goods takes place i.e when the title of goods gets transferred in the favour of purchaser i.e when the sales gets completed. When the transfer of property in goods takes place is a question of fact depending upon the terms of the contract and intentions of the parties.

In Kuppuswami Mudaliar & Sons vs. State of Madras (1974) 34 STC 6 (Mad.) the assessee(seller) had dispatched the goods to the purchasing dealer on 26th March, 1964, and 28th March, 1964; but the goods had actually been taken delivery of by the purchasing dealer by clearing the documents from the bank after payment of the sale price only after April 2, 1964.

At the time of dispatch of goods purchasing dealer was not registered, however when the purchasing dealer got the delivery of goods after clearing the payment to the bank, he became a registered dealer and thereby he issued C form to the seller.

C forms were not accepted on the ground that sale took place at the time of dispatch of goods and at that time purchasing dealer was not a registered dealer, hence concessional rate of CST cannot be claimed.

The question was, as to when the sales can be said to have been completed. The Tribunal took the view that the dates of dispatch of goods should be taken as the dates of sale.

However it was held by the Madras High Court that the date of sale should be taken to be the date when the property in the goods passed from the assessee to the purchasing dealers which was, when the purchasing dealers retired the railway receipts from the bank on payment of the sale price as till that time the assessee(seller) should be taken to have retained the right of disposal over the goods. As on the date of sale the purchasing dealers had registered themselves under the Act, the assessee was entitled to the concessional rate of tax.

Conclusion: From the above judgment it is clear that so long as the transfer of property in goods does not take place, the sale does not get completed. The crucial date when sale gets completed is the date when the title passes.

C form is to be issued only for a completed transaction of inter-state sale and therefore date for the purpose of issuing C form will be the date when sale gets completed.

When the transfer of property in goods takes place and consequently sale gets completed, is a question of fact and is to be decided on the basis of intentions of the parties and the terms of the contract.

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Read Other Articles from Advocate Amit Bajaj

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

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28 responses to “Crucial date of sale for issuing C forms”

  1. Dilbagh Singh says:

    The goods of the Invoice dated 26.03.17 received on 02.04.17, is accounted on 31.03.17 for the Inter State transaction.
    how will it affects Sales Tax Returns?
    How will it affects Closing Stock?(We Want our Stock to get Increased)
    Thanks

  2. shankar says:

    Dear sir

    I purchased goods in February 2012 worth Rs 2.8 lacs. Of which the goods worth Rs 2.3 lacs were returned in August 2012 to the supplier. Now supplier is demanding for C form for full value(i.e. Rs 2.8 lacs) whereas my concerned CTO says c form can not be issued for returned goods. Request you to please give your opinion for a solution of this issue

  3. CA R.K.BHALLA says:

    Dear sir

    Pl note that the c form is issued to the seller by the buyer,if you can prove
    that the goods were actually purchased and received,payment made but due to clerical mistake it could not be booked in the books of account does not deny
    the benefit of concessional tax,as the substantial right can not be taken away
    due to technical beach(SC).

  4. CA R.K.BHALLA says:

    Dear sir

    C form can e issued after the assessment also,as these can be filed after the assessment in appeal.There is no bar under the provision of the CST ACT.

  5. Salman says:

    Dear Sir
    We have not recorded a purchase which took place one year ago. Can I book purchase now and issue C Form

  6. CA R.K.BHALLA says:

    Dear sir

    The c form has to be issued on the basis of invoice date and its value.It does not have effect of receiving the goods.The seller can mail or send scan copy of the invoice to
    the buyer who can book the entry in his books of account showing Goods in transact and
    can book his purchase.I think this method can be adopted to clear the doubts.

  7. CA R.K.BHALLA says:

    Dear sir

    The C form has to be issued on the date of the invoice and not when the goods are
    received.For safer side seller should inform the buyer about the sale invoice,either mail or scan copy the buyer can pass the entry in his books of account showing goods
    in transact and account for the goods in books of accounts,in this way there will not be any dispute/problem.I think so.

  8. vaidyanathan says:

    sir, we have completed our assessment for upto 2012-2013 ,, now our supplier is requesting “C” form for 2011-2012 and 2012-2013
    is it possible to get “C” form the year which we have completed assessment.

  9. ravi chandiran says:

    Dear Sir,

    I also have a feel that most of the parties are issuing the Form “C” on the basis of the Date of Invoice and not on received date. Invoice date is important to issue the Form “C” and it is decides the Quarter under where it falls. Moreover, this is also accepted by AO’s in various States. Hence, there is no doubt that Form “C” has to be issued on the basis of the Invoice Date not on Receipt Date.

  10. upendra says:

    Dear sir, consignee is ahmedabad(material phishicaly received ahmedaba) & buyer is maharashtra which sales tax is applicable.
    please guid to me…

  11. shobhit Dhawan says:

    Sir,
    I have made interstate sale from U.P. to uttarakhand to registered dealer with sale Invoice ..Is issuance of SALE INVOICE is right ??? OR I should I HAVE TO ISSUE retail INVOICE ???
    iS THEIR any DIFFERENCE IN RETAIL AND SALE INVOICE??
    kINDLY tELL i WILL BE GRATE FUL TO YOU.

  12. Jayant D Kalpavriksha says:

    In my opinion u have to issue the C forms as per your accounts and turnover declared in the monthly return. If the same falls in a differennt quarters the same be issued as per accounting dates and not according to the date of billing. In such an event in my opinion u have to issue C form for earlier quarter sale in the next quarter. In such an event u have to generate two c forms. But the problem is wheterh department will generate such two different c forms? In my opinion if there is no option in the system the same needs modification by the department otherwise it will lead to practical difficulty for the transaction takes place at the end of quarter.

    • Hasan says:

      suppose Mr x of kolkata sale goods to Mr Y of chennai on 2nd quarter 11/09/2015,Invoice No. 001, but Mr Y of chennai given C form of that goods on 3rd quarter i.e. 11/10/2015, Invoice No. 001, in C form this date is mention of the same financial year.

  13. Musharraf says:

    Dear Sir we are exporter & manufacturer of leather goods in the financial year 2012-2013 we purchased finished goods & exported as same . but some quantity is balance . is that full amount of purchase goods issued form H or export amount issed form H . pls give the suggetion

  14. ANANDA C R says:

    31st march 2013, we are raise the invoice to interstate but they received the material on 1st week of April 2013, which quoater they issue the c form.Please clarify

  15. SAVAN PATEL says:

    What is procedure of Transferred within one year of Articleship under CA R
    ules and Regulation ???

  16. Prashant Soni says:

    To issue c form first of all supplier have to register the goods on which it want concessional duty. Another issue is if there is no column in C form of date on which it is received for that you could add this date column in supporting attachment sheet.

  17. Harish Chander Bhatia says:

    Dear Amit,

    As per practice prevalent,the sale gets completed on receipt of the goods by the buyer, if the month, or e year overlapped during good sen an god received , th statutory form can be obtained from department for the period mentioned on the sales after documents having been verified

  18. Inder Kumar Kamra says:

    Form C prescribed under CST Rules,purchaser certifies that goods are purchased as supplied by supplier vide relevant Bill No/Cash Memo/Invoice No.and Date and purpose of purchase. There is no column in Form C to indicate the date on which purchase has been accounted for in his books except the date of issue of Form.Seller has to furnish form to Assessing Officer to claim his concessional CST sale to eligible registered dealer. I agree this is genuine issue and dealers are facing lot of problems with Assessing Officers for submitting forms which are issued in subsequent quarter of are treating is different ways, If Form C is to be issued when sale is complete, then seller should declare turnover only in that period and deposit CST. Will department allow this ?

  19. Manish Jain says:

    “ Provided also that where, in the case of any transaction of sale, the delivery of goods is spread over to different quarters in a financial year or of different financial years, it shall be necessary to furnish a separate declaration or certificate in respect of goods delivered in each quarter of a financial year”.

  20. Manish Jain says:

    The Sales Tax Officers in the Central Repository may raise objections due to this mis- match of dates and refuse to issue the declarations for the period of purchase as recorded by the purchaser or the officers in other branches may also take an objection that the sale/consignment transfer against the declaration cannot be allowed due to the difference in dates. Alternatively, the officers may ask the dealer to rectify the declarations.
    3. The 2nd proviso to rule 12(1) in the Central Sales Tax Rules (Registration & Turnover)

    rules, 1957 reads as follows:

    “Provided further that a single declaration may cover all transactions of sale, which take place in a quarter of a financial year between the same two dealers”.
    The 3rd Proviso to the same sub-rule reads as follows:

    “ Provided also that where, in the case of any transaction of sale, the delivery of goods is spread over to different quarters in a financial year or of different financial years, it shall be necessary to furnish a separate declaration or certificate in respect of goods delivered in each quarter of a financial year”.
    The first proviso to Rule 12 (5), which relates to Form F reads as follows:

    “Provided that a single declaration may cover transfer of goods by a dealer, to any other place of his business or to his agent or principal, as the case may be, effected during a period of one calendar month.”

  21. L K Kathare says:

    The case discussed by the author relates to the period prior to introduction of the present third proviso to sub-rule (1) to Rule 12 of CST (R & T) Rules, 1957 with effect from 01-10-2005. Now it is mandatory to issue Form C declarations based on delivery and where deliveries are spread over to different quarters in a financial year or different financial years, it shall be necessary to furnish a separate declaration in respect of goods delivered in each quarter of a financial year.

  22. AMIT BAJAJ ADVOCATE says:

    Date of invoice will be the crucial date if transfer of title of goods is not conditional one as in case of Kuppuswami case discussed in the article. The intentions of the parties are important

  23. DSMURTHY says:

    It also has confusion in discharge of Entry Tax liability. ET is paid on physical receipt of good and booked in accounts. However, C form is issued based on vendor invoice number and date (transfer of ownership.

    C form issued in previous Fin year for supplies made 31st march. ET is being paid in subsequent ass year on receipt of goods in April.

    My query is, will Ass officers accept for this.

  24. Jignesh shah says:

    As per stand by CST officer in mumbai they are issueing C form on the basis of dat of invoice not on date of goods received from buyer.can Is there any latest clerification on that

  25. Amit Bajaj Advocate says:

    @ Harish give reasons for your non-agreement.

  26. harish says:

    This is a wrong notion. C form is to be issued as per bill no. and date and not from date of completion of sale.

  27. S K Singal says:

    How far is the purchaser justified in reducing the value of sale Invoice while entering the details in the C form ?
    It may be a different matter if the purchaser claims some discount / rebate / LD while settling the payment BUT should that reduce the sale value to be shown on nthe C form WHICH would thus create further liability of additional CST for the short value in form C;
    In fact, describing details of Sale Invoice on C form is more for identification for the transaction which may be eligible for concessional CST and therefore any reduction in Invoice SALE value should be avoided to save further levy of additional demand for short value thus shown on form C ?

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