SECTION 6A OF THE CENTRAL SALES TAX ACT, 1956 R/W RULE 12(5) OF THE CENTRAL SALES TAX (REGISTRATION AND TURNOVER) RULES, 1957
Section 6A of the Central Sales Tax Act, 1956 provides that in case the goods are transferred by a dealer from the state of Rajasthan to his another place of business outside the state of Rajasthan or to his principal or his agent outside the state of Rajasthan then he is not required to pay tax on transfer of such goods outside the territory of Rajasthan. But in order to claim such exemption the selling dealer is required to furnish a declaration form to his AO. This declaration form will be in the Form F and will be provided by the purchasing dealer to the selling dealer. This F Form will include all the transactions on monthly basis. It means as as C Form was issued on quarterly ,F Form will be issued on Monthly basis. In case no F Form is furnished by the selling dealer to the Assessing Authority then such movement will be treated as sale and tax will be payable by the selling dealer.
Thus F form will be provided in case of Branch Transfer, Stock Transfer and Consignment sale. In all these cases the selling dealer is not required to pay tax if duly filled F Form is furnished to the AO.Branch Transfer or stock transfer is nothing but transferring stock from one place to other branches in India. Consignment sale means delivery of goods to any agent for sale on his behalf. In case of consignment sale also no interstate tax is attracted but can be affected against F Form. The property on the goods sent to the agent remains with the principal. The agent will maintain the complete record of the goods received and the sale affected by him. The consignment agent will issue the F Form to his principal.
There are some cases when the goods are transferred from one state to another state for Job Work purposes. In that case also F Form is mandatory to claim the benefit of exemption from payment of tax. This job work purposes includes:-
- Movement of goods for job work outside the state
- Goods received for job work and after performing the job work dispatched outside the state of Rajasthan.
In both the cases the F Form is required to be furnished by the dealer to his AO. In case the F Form is not furnished then then such movement will be treated as sale and tax will be payable by the dealer.
Thus this F Form is a declaration form for getting exemption in case of Branch Transfer of goods or in case of Consignment sale.
It is to be noted that there should not be a pre-existing order with the branch for the sale of goods sent to the branch through branch transfer and getting exemption on furnishing Form Suppose a dealer registered under RVAT have branch offices in several states including Mumbai. The dealer in Rajasthan received an order from a customer of Mumbai and deliver the goods directly to the customer but the billing is in the name of Mumbai Branch in order to get tax exemption against F Form. In this case this will not be treated as branch transfer but will be treated as inter-state sale under CST Act. Same rule is applicable in case of consignment sale also. If it proved that goods are dispatched by the principal against any pre-existing order of a buyer then such transfer will be treated as inter-state sale and benefit of consignment sale will not be available.
Moreover in case the branch received an order from a customer and sends the specification to the head office in Rajasthan to manufacture such goods. Head office deliver goods to the branch and later on branch sold these goods to the customer. Branch also issued F Form to the head office. In this case also the transaction will be treated as sale under RVAT and not branch transfer as was decided in case of Sahiney Steel & Press Work Ltd. v/s CTO(1985) 60 STC 301(56).
Thus following points should be kept in mind while transferring goods from one state to another against F Form:-
- Goods are dispatched by factory to branch without reference to any particular order or customer. Moreover goods should not be manufactured according to the specification of a particular customer and should not be manufactured specially for a particular customer.
- Goods are dispatched to the branch not to the particular person or buyer.
- Excise gate pass and delivery challans should be in the name of the Branch
- Delivery is taken by an employee or staff of the branch In whose name the delivery challan is made
- Property of the goods will be in the name of assessee until it is sold out by the branch to a particular buyer
- Delivery of goods by the branch to the buyers should be by their own delivery challans and such delivery challans should be prepared after receipt of the goods in the godowns.
- The branch to which the goods are sent should be registered under the sales tax act of the relevant state.
