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To constitute interstate sales, one of the basic requirement is that there should be sale. If a person sends goods outside from its state to its branch office in another state then it is not sale because you cannot sell goods to yourself. Similarly if a dealer sends goods to its agent in another state who stocks and sells goods on behalf of the dealer, such agent is called consignment agent and such stock transfer is also not considered as interstate sales since there is no sales involved in it, sales will take place when such agent will sell goods. But to prove such stock/branch transfer, F form is required to be produced as proof.

F form required for stock transfer– F form is required to be produced as proof of stock transfer. As per section 6A(1) submission of F form is mandatory to prove stock transfer. Otherwise, the transaction will be treated as sale for all purposes of CST Act.

F Form is issued by the branch office/consignment agent receiving goods as branch/stock transfer to its head office/principal who is sending the goods by way of  stock/ branch transfer. The H.O./Principal produces such F forms to its assessing authority to prove such stock/branch transfer.

One F Form for one month: First Proviso to Rule 5 of CST Rules 1957 provides that one F form covering receipts during the month can be issued. If space in F form is not adequate, a separate list may be attached as annexure to form F giving details, provided that the annexure is firmly attached to the form. The blank form has to be obtained from sales tax authority in which the transferee is situated, i.e. State where goods were received. If the form is lost, indemnity bond has to be given and duplicate form clearly marked as Duplicate can be issued.

When Stock transfer is treated as Inter state sales: When goods are dispatched to Branch office or consignment agent in other state and thereafter these goods are sold from the branch office or by the consignment agent then it is not a sales and is stock or branch transfer hence no CST liability arises.

However, if the movement of goods is occasioned on account of sales, the movement will be treated as interstate sales. It can be explained with an example

Suppose the dealer A registered in Punjab who manufactures some goods and send these goods after manufacturing to its branch office situated at Delhi wherefrom the goods are sold in Delhi. Now the movement of goods from Punjab to Delhi will be treated as stock transfer or branch transfer and for which no CST liability arises and F form will be issued by Delhi Branch to Punjab dealer.

But if a person B in Delhi wants to purchase some goods of special description which is not normaly manufactured by A and Mr B places order with A in Punjab for manufacturing special descriptioned goods. Now if A manufactures such ordered goods and send them to its branch at Delhi then such movement will be an interstate sales and not a branch transfer since the movement of goods was due to a predetermined contract of sales.

Thus where goods were sold through branch, but buyer was known and identified before goods were dispatched from factory. Obviously this was held as inter state sales and not a stock transfer- Electric Construction and Equipment Co. Ltd. V State of Haryana- (1990) 77 STC 424 (P&H HC DB)

In South India Viscose Ltd. v. State of Tamilnadu-(1981) 48 STC 232 (SC)= AIR 1981 SC 1604 it was held that if there is a conceivable link between contract of sale and the movement of goods from one state to another in order to discharge the obligation under the contract of sale, the interposition of the agent of seller who may temporarily intercept the movement will not alter the interstate character of the sale.

F form is not a conclusive evidence but it is conclusive after assessing officer passes an order: Submitting F form is not a conclusive evidence per se to prove beyond doubt any stock or branch transfer. The assessing officer may make enquiry as to whether declaration furnished by dealer are true or not. The sales tax authorties can investigate if they are of the opinion that the movement of goods is an interstate sale and not stock transfer.

Section 6A(1) provides that the dealer may submit form F, along with evidence of dispatch of goods. If Dealer fails to furnish such declaration, the movement shall be deemed for all purposes of the Act to have been occasioned as a result of sale. Section  6A(2) provides that if assessing authority is satisfied after making enquiry that the declaration furnished by dealer are true, he shall make an order to that effect and thereupon, the movement of goods to which the declaration relates shall be deemed for the purpose of the CST Act to have been occasioned other than as a result of sale.

In Assam Company (India) Ltd. v. CT, Assam (1997) 107 STC 154 (Gau HC DB), it was held that F form is not conclusive. Sales Tax Officer can make enquiry whether the declaration is true and can reject the F form, if the transaction is found not to be genuine.

In D Dhandapani v. State of Tamilnadu-(1995) 96 STC 98(Mad HC DB), it was held that section 6A(2) of CST Act authorizes Assessing officer to make enquiry that particulars contained in the declaration furnished by the dealer are true and for this purpose other evidence produced by dealer is also to be considered. Authority can call for other information to verify the truth of particulars contained in form F. The dealer has to prove that details in form F are true. If he is unable to do so, transfer of goods can be taken as on account of inter state sales.

It has been held that by production of form F and providing proof of dispatch of goods, the initial burden of proof on the dealer is discharged- State of AP v. Dairy Development Corporation Ltd- (1994) 95 STC 478 (AP HC)

Once assessing officer had made enquiry and passed order that the particulars stated are correct, the presumption that the movement has occasioned otherwise that as a result of sale is conclusive. Reopening of assessment under State Sales Tax would not be permissible only on limited grounds of fraud, collusion, misrepresentation or suppression of material facts- Ashok Leyland Ltd v. State of Tamilnadu 2004AIR SCW 1001.

(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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98 Comments

  1. N PRANESH RAO says:

    We have been utilizing inter state job work services from the dealers wherein we send the raw material for job work process and receive back the semi finished / finished goods from them. A Job work agreement is entered into with the dealers in this regard. This is not a consignment sale or branch stock transfer.
    In thsi connection please advise us whether production of F forms is applicable in this instance?

    1. CA J D Adhyapak says:

      Article is very good substance wise. However, I could not get clarity on reading the Article on whether F form under the Central Sales Tax Act can be taken for tax free stock transfer to other state for executing works contract?

  2. Ashokkumar says:

    I had made branch transfer of non taxable goods ( (as per Kerala vat rules) toBangalore from Kerala in 2011-12.But I had not submitted F forms Please inform me if there is any tax liability

  3. chandrakanth says:

    sir, the Interstate stock transfer outwards of capital goods by the company from one state (Head office) to its branch situated outside the state and vice versa, whether F-Form declaration required or not under CST Act,1956. Please clarify.

  4. veerendar kumar bhandari says:

    can F-form be submit to Head Office at Net Value i.e. after setting of Goods Return from Total Goods Transferred from Head Office.

    Thanks for your information it would be appreciated if any citation is given for this

  5. MOHIT KHANDELWAL says:

    RESPECTED SIR,

    IF ‘A’ IN U.P BUY RAW MATERIAL FROM PUNJAB @2% CST AGAINST FORM ‘C’ AND AFTER MANUFACTURING IT IN U.P MAKE STOCK TRANSFER AGAINST FORM ‘F’ TO HIS BRANCH ‘B’ SITUATED IN UTTARANCHAL .

    WILL THIS TRANSACTION IS AS PER CENTRAL ACT U.P OR NOT ?

  6. Prashant says:

    hi
    I am distributor for whole state of one company based in other state.
    Is it possible for the principal company to transfer the goods against form F?
    Who will bear the tax liabilities and in how much %

  7. Mehul mevawalla says:

    Hi i am importer of Computer accessories in mumbai. i want to transfer goods to my Gujarat godown & then sale the products from there. Which form should i send with transporter for goods transfer ? also my billing will be done from Mumbai office & my Gujarat representative will deliver & collect payment for clients. should i take VAT/CST registration in Mumbai or Gujarat ? please advise

  8. Baata Sastry says:

    Form F is issued by consignee (who receives the stock) to the consignor (who had sent the stock). Therefore, I feel your assessing officer asking for form F is not justified. Form 38 (or challan 4(5)(a)) should have been issued by the consignor, wherein the consignor would have mentioned that the goods were not for sale but for repair & return. That should be sufficient proof that you have not purchased that machinery.

  9. Ankush Mundhra says:

    Dear Sir,
    We have manufacturing unit in Baddi (H.P.) and anther is goa . we are approx 26 branches in all over india.

    FY 2012-13 we have transfer some of Raw Material and Packing Material to our goa plant and not receive any form f. We have received form F only for Finish Goods.

    Our Assessing Authority is demand Form F for Raw and packing Material stock transfer but we have received form F only for Finish Goods.

    So requested to you kindly suggest or advise what we will be do?

  10. vinay says:

    Dear Sir,

    We have transfer stocks from Gurgoan to Bangalore and Chennai in May 2015. Now some stocks were not sold and get Expired.

    now Consignee is denying to issue F form and Demanding the Tax of 14.5% for stocks laying in his Godown, is company as to give tax

    suppose if consignee is not giving F form what should be the Next Step

    Regards

    Vinayaka

  11. vinay says:

    Dear Sir,

    We have transfer stocks from Gurgoan to in May 2015. Now some stocks were not sold and get Expired.
    now Consignee is denying to issue F form and Demanding the Tax of 14.5% for stocks laying in his Godown, is company as to give tax
    suppose if consignee is not giving F form what should be the Next Step

    Regards

    Vinayaka

  12. SS KWATTA says:

    We made stocks transfer from Punjab to Chandigarh in the year 2008-09 Our assessment was done in November 2015 At the time of assessment we could not produce F forms ..We applied for F forme in December 2015 and received the same .Can we produce F forms at the time of appeal even if F forms are issued by the department after the assessment is done

  13. K. D. Zala says:

    Dear Sir,
    Kindly guide me to generate f From process in department of Gujarat Gov. goods return from our other state consignee sales agent

  14. Kumar Jain says:

    For doing business on ‘F’ Form, is it necessary to have same firm names for head office and branch office situated in different states?

  15. Nilesh Shah says:

    We have purchase the goods against the CST @ 2%. Invoice date is 24 December 2014 and received the goods in 26 march 2015. The vehicle is crossed from the barrier on 26 December but it has been received by us on 26 March 2015 (almost 3 months late). Goods was not in transit but we have not any information regarding that where was the material within these three months. We also follow up with the vendor but he is not told us the clear fact. Kindly please guide us that how we can issue the c form so that department make no query on that in future. please guide us with the relevant law of provision.

  16. Subodh Agrawal says:

    Dear Sir,
    We are sending goods for Job work under 4(5) a Chalan for further processing from Maharashtra state to Gujarat state. Our job worker wants “F Form”. We can not issue “F Form” unless we show such transaction in our VAT/CST Return. My question is where should we show such transaction in VAT/CST return and what amount should we enter in return(Cost of Material+ Job work Charges or only Job work Charges) so that we do not face any difficulty while getting “F Form online”. Please advice.

    Also we are receiving material from manufacturer under 4(5) a Chalan from Gujarat for further processing (for Job Work). We process and send back the material to Manufacturer. In this case also manufacturer wants “F Form”. My question is where should we show such transaction in VAT/CST return and what amount should we enter in return(Cost of Material+ Job work Charges or only Job work Charges) so that we do not face any difficulty while getting “F Form online”. Please advice.

    with regards

  17. Sanjay Oberoi says:

    Dear Sir,

    We are a machinery manufacturer. Our clients from other states send us the machines for repairs on challans or invoices mentioning Not For Sale & we bring them to UP by Form 38, way bill. After refurbishing the machines we send them back to clients & charge CST 2% or 14 % on the parts value added to machines. They provide us Form C for the sale part.

    Now our assessing officer is asking for Form F on the machine declared value for challan by which machines came to us. Is his demand justified & any circulars on that? Please help, appreciate your efforts Sir.

  18. ANISHKUMAR says:

    sir, we are manufacturing the goods in tamilnadu and sending finished goods to our H.O at Mysore[karnataka] as stock transfer. Our H.O issuing to us Form F every month for the receipt of finished goods.Thereafter sales of said finished goods by our H.O. Raw materials & packing materials are received by us from other states ordered by our H.O. purchased bills require Form C. We have no sales in tamilnadu state.problems if any will arrive in future?

  19. Sachin says:

    Sir,

    Pls tell me whether it is necessary to register the consignor as a Additional place of business in our registration certificate for the purpose of F form

  20. js shekhawat says:

    Sir,
    Please clarify that whether Goods Return by Branch back to Head Office will termed as goods transferred to branch by Head Office against F Form.
    Further, can F-form be submit to Head Office at Net Value i.e. after setting of Goods Return from Total Goods Transferred from Head Office.

    thanks
    jsshekhawat

  21. js shekhawat says:

    Sir,
    Please clarify that whether Goods Return by Branch back to Head Office will termed as Interstate Sales or simply be transferred against debit note. These goods are part of goods transferred to branch by Head Office against F Form.
    Further, can F-form be submit to Head Office at Net Value i.e. after setting of Goods Return from Total Goods Transferred from Head Office.

    thanks
    jsshekhawat

  22. CA Lalit Kapur says:

    Sir,

    Please clarify that whether Goods Return by Branch back to Head Office will termed as Interstate Sales or simply be transferred against debit note. These goods are part of goods transferred to branch by Head Office against F Form.

    Further, can F-form be submit to Head Office at Net Value i.e. after setting of Goods Return from Total Goods Transferred from Head Office.

    Thanks

  23. preeti pal says:

    dear sir,

    I have purchased goods from mumbai aganist c from first time, i have confused to calculate our sale price
    ex. purchase bill- goods value = 100/-
    excise &custom=14 %=114
    discount-5 %=-5
    cst-2 % =2.18
    total value=107
    how will add entry tax or vat tax on this amt to calculate the sale price
    .

  24. Ankit Sharma says:

    Dear Sir,

    We are Importers, based in Mumbai and have VAT number registration in Mumbai, Maharashtra State.

    Now, If we Import the goods in Other state say Callcutta PORT in West Bengal and custom clear the cargo in West Bengal, and intend to sell the goods in same state of West Bengal. Please let us know if we need to take the VAT registration in West Beangal or can we issue Tax Invoice from Mumbai to customer in West Bengal after charging 2% CST.

    Thanks in advance.

    Regards

    Ankit Sharma. Mumbai

  25. Krishnakumar says:

    What is the sales tax procedure for movement of Capital Goods from Head office in Alappuzha,Kerala to Branch Office at Channai

  26. Mary says:

    Dear Sir,

    We have branches at AP,Karnataka but our corporate office is at chennai and we are service tax registered. The materials for service are being purchased in chennai paying full tax. Now that can we transfer the material to our other branches in other state without tax

  27. Ashish Dhadda says:

    We received online F form but the problem was that we wrongly mentioned the date of delivery can we delete the form or issue other online form F or what we will do and we have the original courier receipt . Suggest us

  28. P.CHANDAN says:

    When goods are transferred from one state to another and if goods are not taxable in both states then Form-F is required or not.

  29. neha jain says:

    Dear Sir
    I want to know how to cancel the F form issued. Procedure to cancel F form issued under Maharashtra Sales tax
    Thank u

  30. Mehul Vasaiya says:

    Dear Sir(S),
    Our Company has raised invoice in Sep-2014 inclusive of 20% CST, against one of our customer in gujarat. the said customer than given to us c-form against 2% purchase, and deducted the payment by difference amount i.e. 20%-2%=18% which amounts to RS.44,000. please help how can we take the set off of the said amount of 44,000.00 from sales tax department.

  31. Ashok Kumar Gupta says:

    SIR,
    DEALER IN RAJASTHAN PURCHASING THE GOODS ON C-FORM (INTERSTATE) AND CONSIGMENT SALES/STOCK TRANSFER TO HIS BRANCH OFFICE TO OTHER STATE ON F-FORM, IF ANY TAX LIABILITY i.e. PURCHASE TAX OR VAT TAX OR ENTRY TAX LIABILITY. KINDLY SEND DETAIL WITH CITATION.

    THANKS

  32. Bhakti P says:

    Sir,
    We are importing goods in Mumbai.
    Iec has only Mumbai address.
    We will directly send goods to Rajasthan.
    Rajasthan warehouse has vat and cst.
    For sending goods from Mumbai, do v need vat or cst.
    Or if we just add branch address in iec, is that okay.
    Please reply.

  33. Satya says:

    Dear Sir,

    Suppose one person is sending a consignment from Gwalior to Raipur and both the persons are same. Means consignor is distributor at Gwalior but the same consignor is having his shop at Raipur and he is issuing Tax invoice against F Form then will he be liable for CST 2%.

  34. Avinash says:

    Sir,
    We are dealing with Pharmaceutical Medicine marketing. My question is Can we issue Form-F against near expiry goods returned from interstate Consignee Sales Agents?

  35. Mangesh says:

    Dear Sir,

    We are in Maharashtra purchase products from Panjab against c Form but some Product receive defective we will send it as defective by Transport to Company & company will issue Credit Note , Then this transaction required any form like F Form etc

  36. Beena says:

    Sir,
    if the amount of Branch transfer Purchase(F form) is omitted by mistake in 201 form but if Sheet of F form is submitted while uploading return then how this mistake can be corrected if even return can not be revised?(return of September month)

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