Goods Movement Form under CST Act 1956; C, F, E1- E2 Form at a glance
1. INTRODUCTION
There are certain type of forms which has been prescribed under central sales tax rules 1957, form c for making interstate purchase at lower rate, form E1 and E2 used when interstate sale or purchase which are effected by mere transfer of document of title (subsequent sale), form F used to transfer goods from one branch to other in different state without making it as sale.
2. ANALYSIS
A) C FORM
It is printed paper form which is issued by VAT department to the registered dealer who makes interstate purchases of those goods which are mentioned in his RC (registration certificate). While doing transaction purchasing dealer furnish this form to selling dealer in course of interstate purchase to get exemption/reduction in sales tax rate. It is defined under section 8(1) of CST act 1956.
From above chart it is clear that firstly purchasing dealer will furnish form C to the selling dealer in Punjab to claim tax exemption or reduced rates of taxes (2%) thereafter selling dealer will submit these form to the department of VAT in Punjab .
One C form can be used for no of transactions for one quarter of financial year.
B) E1 AND E2 FORM
As per section 6(2) of CST act first interstate sale will be taxable, subsequent sale during movement of good by way of transfer of document is exempt from tax. For making subsequent sale exempt Form E1 & E2 are used.
From above illustration it is clear that how goods/document of title move from one place to another. Actual delivery was received by C in Jaipur however between A, B there was only transfer of title. Only the first sale will be taxable, other subsequent sale will be exempt if dealers are registered.
In above example A of Mumbai will receive C form from B of Delhi & will issue declaration in E-I form to B of Delhi .Later on B of Delhi will issue declaration in Form E-II to C of Jaipur against which C will furnish C form to B (Delhi).
If above chain is broken then the exempt sale will get reversed and CST will be applied on these transaction.
C) F FORM
With this, goods can be transferred/delivered from one state to another without recognising it as a sale. For instance the head branch may transfer goods/stock from one state to another to its branch or agent without becoming liable for CST. It is issued by the VAT department on the request of the purchasing dealer (branch or head branch) .Forth; the purchasing dealer submits F form to the selling dealer to claim exemption from making it as CST sale. As per section 6(A) of CST act F from is mandatory to prove transaction as stock transfer.
Is F form required in case goods are returned? The answer is yes, decided by the hon’ble Supreme court in case of AMBIKA STEELS that the liability of furnishing F form would be still there even if stock or goods are required to be sent back.
Single F form may cover consignments of goods transferred during one calendar month.
It is advisable that Registration certificate {RC} should contain the name and address of branches to which stock is transferred against F FORM {branch transfer} to claim concessional/nil rate of tax. One F form has to be issued for each month.
Conclusion – Many peoples get confused regarding C, E1 & E2 form. So these forms are discussed above at glance to remove ambiguity. Proper knowledge of these forms may result in smart movement of goods between states.
Article by –
Anubhav Jain (CA Final),
Kota (Rajasthan),
Email- anubhav5jain@gmail.com
sir,
I am NARAYANA REDDY, doing articleship in chennai
You have given information about CST, AND VAT. That information is the best guide to me. I need that information but there is no copy and paste option
Dear Anubhav,
Kindly inform me if there are any procedure under the CST Act as to what are the requisite documents required by the sales tax department in order to collect E1 forms. Sales tax department is asking for the endorsed copy of the LR which our dealer has endorsed on the ultimate customer and also the receipt of ultimate customer on the LR.
Pl advice, the correct method of collecting E1 forms from the sales tax department.
With Best Regards,
dear ,
my firm registered in UP and i made a sale ( Electronic Security Equipment) in Haryana, what is the CST rate will applicable , without C foam.
please help me for this case.
Dear Sir,
I have a chocolate manufacture company in gujarat. & our Finish Goods Stock Transfer in our C&F location for differencial States. So, I request you to provided information against Credit Reduce Ratio Format
If We Are sending material against F form so it is mandatory to put the stamp of Branch Transfer on Builty/GR/Way Bill.
please reply
dear Mr. Anubhav,
good article in clarifying the Forms.
can you also pl. clarify the following?
our company is a mfr of pharma products in Uttarakhand stock transfers to our branch in Hyd on F form, but physically sends the goods to our Agent in Bihar, who ultimately sells the goods in Bihar on VAt basis.
our Hyd branch issues F form to Uttarakhand branch.
is this transaction LEGAL and does not involve any litigation. which type of form (including the waybill ), if any is to be issued by our Agent in Bihar.
thanks in advance,
Ramesh challa
R/s Sir
i am a registered cement dealer (under Hvat and CST) in Kaithal Haryana state.
i want to sale cement in Punjab state which is 10KM far away from my home
business address.
i want to open an authorised office/ branch to sale my cement in Punjab state also .
what”s its procedure to sale cement in other state under govt. rules?
please give me procedure to do it in leagal manner.
thanking you
with great regards –
R/s Sir
i am a registered cement dealer (under Hvat and CST) in Kaithal Haryana state.
i want to sale cement in Punjab state which is 10KM far away from my home
business address.
i want to sale my cement in Punjab state also .
what”s its procedure to sale cement in other state under govt. rules?
please give me procedure to do it in leagal manner.
thanking you
with great regards
Dear Sir
If our customer is within the state and ask us to deliver the goods to other state of his site.Can he issue the c forms to us.It is valid or not.
Hello:
Sir, our foreign client placed an order to deliver the goods to their counterpart in Mangalore. So we placed an order to Bangalore party and delivered the goods in Mangalore as per the instruction from the abroad client.
In this case How I need to bill my foreign client. Whether the full rate of CST need to be charged. Pl advise.
Dear Anubhav, I am Manufacturer registered in Uttar Pradesh and planning to sell electrical Goods to a registered dealer in Haryana. for the below sale My company A — Uttar Pradesh, Buyer company B — Haryana End user company C — Haryana 1. Is this type of transaction eligible under section 6(2) of CST act? 2. Can my company A offer goods @ 2% CST against FORM – C to the buyer company B? 3. If the buyer B cannot issue me FORM – C , what is the rate of CST to be applied? 4. If buyer B wishes to sell the goods again to an another company C in Delhi and requires ‘E1′ form completed my company, Do i have to make change in CST rate or any other taxes involved? In this case what is the invoice to be sent along with the goods. Note : i do not want the end user to know what are the sale prices offered to my buyer.
Dear sir
Please let me know the execution procedure to be followed when customer placed order from chattisgarh state where they have cst registration and pleace order to us for supply of goods at other state where they dont have registration and end user is with individuals and customer asking to do invoicing on raipur but stocks to be delivered at other states,kindly please let me know the procedure to followed in such situations.
Regards
Shravan Kumar
Dear Sir
I need to know that if I make two despatch to the same customer from two different state say Karnataka and Maharastra, and the customer issues a single C form mentioning both transactions in the same form as my company name is same in both the state- what would be the procedure to utilise the same C form in both the state.
thanks & regards
Debasish
Dear sir,
we are manufacturing welding electrodes at hyderabad telangana ( state) and we have brance office at visakhapatnam (A.P.). Can we send the material directly to customers against form f, with out sending the material to branch office in ap.
if we send the material directly to customers in other state ,every time we should send the form f.
regards
p.k.babu
Suppose i want to trasfer Tanker of Chemicals against F form from Punjab to UP
As my Stockiest got Tanker and he trasfer to Party in U.P against U.P VAat Billing .
Now i want to Known that if i Transfer to party directly but stockiest Change bill on the way for VAT purpose .IS it cumplosary to unloadtanker at stockiest point or we can send same tanker to Party there .
Hello everyone.
Please clarify the following case-
X from Kanpur,U.P. wants to buy goods from Y in ahmedabad,Guj.
Now x has to sell the entire lot to Z, a dealer in Kanpur but Z wants the delivery of goods at 4th party D in Chennai,A.P.
The material will be directly dispatched from ahmedabad to chennai.
What are the various Forms needed for this kind of sales.
All the parties are registered dealers.
Thanks
Rohit
Dear Anubhav,
I am a registered dealer in delhi. Want to do sale in trasit.
Pick up of material from Maharashtra city A (against 2% cst)
myself based in delhi.
The receiver of goods is in Maharashtra city B.
Can I send the material with transfer of title of goods i.e., GR but without issue of E form.
Sir/ Madam
I have recently joined in a comp.
I have a issue here, follows : Goods are delivered within the state to a job worker of our client,( here goods have not crossed border). But when we bill our supplier, we charge CST to them.
Kindly clarify and suggest.
Thanks
Pradeep
Dear Sir,
When party A (kolkata) purchases goods from Party B (kolkata) and delivers the goods to Party C (Bihar).
What will be the VAT/CST charge in the process?
As I know for same state no CST will be charged. So local VAT is charged.
Now for Party B to Party C which is interstate sale can be charged as CST against C form.
So I want to know whether Party B will consume any loss in the process?
Thanks in advance. waiting for valuable reply.
Dear Sir
If i will purchase goods from other country than which form i should use and also for sale
sir,
what is the sale price when company appoint an agent and another case company have a branch.
@ praveen joshi
without clearing your dues u cant issue any form, it will show error.
at respective tax website there may be the option for the same if otherwise contact your assessing authority.
@anil if u r exclusively dealing in exempted goods (not 0%) then u can done away the liabiliy of registration.
@yogesh jain- Form E is used to make subsequent sale exempt but in your case goods are already exempt so i think no ned of Form E.
I want to purchase tiles from tamulnadu.what is the procedure in check post.plz explain it
Dear Anubhav,
I am dealer (Pvt ltd Co.) registered in Tamilnadu and planning to sell electromechanical components (imported from abroad) to a registered dealer in New Delhi. for the below sale
My company A — Chennai (Tamilnadu)
Buyer company B — Delhi
End user company C — Delhi
1. Is this type of transaction eligible under section 6(2) of CST act?
2. Can my company A offer goods @ 2% CST against FORM – C to the buyer company B?
3. If the buyer B cannot issue me FORM – C , what is the rate of CST to be applied?
4. If buyer B wishes to sell the goods again to an another company C in Delhi and requires ‘E1′ form completed my company, Do i have to make change in CST rate or any other taxes involved? In this case what is the invoice to be sent along with the goods. Note : i do not want the end user to know what are the sale prices offered to my buyer.
Dear Anubhav,
I am a registered dealer in rajasthan. Want to do sale in trasit
pick up of material from UP (against 2% cst)
myself based in rajasthan (item is tax free in rajasthan)
2nd purchaser or receiver of goods is in Himachal Pradesh (Item is tax free in Himachal)
Can I send the material with transfer of title of goods i.e., GR but without issue of E form.
Please comment
We are importers of some International Brands ! Based on Mumbai.
If I dispatch goods to our One of SOR party in Bangalore/Delhi Kolkata on June 29th. and Party received the material after 4th July.
>> We Booked Invoice in June Month.
>> Party received the material and take in their account in July month.
Q.1# as quarter changed,is their any problem to explain the Transit delay to Department. (Because C-form transaction value of 1st quarter is different to Both the parties).
Sir,
Rejection in transit should be opened under which a/c head?
Uma
Further to query of Ms. Preeti on April 30 & your reply of May 18
What if only exclusively Goods which are exempt like say Children Books are to be sold interstate. Here there would be no tax implication ?
Regards
dear ,
when i m going for online C form from website, its showing me the demand and the penalty which are pending..how could i know the demand or penalty arise of??
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
Dear anubahav,
our customer resides in karnataka
materials are dispatching to tamilnadu
paymet is giving by karnataka resides customer
both are register under cst act.
my question is which form do i need to collect.
Preeti Mam,
U cant do interstate sale without CST registration ..
It better to take registration and enjoy at the time of interstate purchase the concessional rate of tax.
T.D.
I think u cant do that .
first add ur branch in the RC , have TIN.
For which state and for what purpose u r using form 402 ?
Sankaranarayanan ji
If u r purchasing locally and then sending goods out otherthan by the way of sale then ….. ITC claimed need to be reveresed either @2 %, 4% …depende from state to state.
Shashibhushan Sharma ji …
Thanx for correcting.
Dear Sir,
Please share the procedure of Billing Sale of goods with me if the case is as follows :
1. My Company is not registered under VAT or CST.
2. I want to sale goods from Delhi to Jaipur.
3. Is it necessary to take the VAT registration if I am doing Interstate sale?
4. Turnover of Company is not more than Rs. 10 Lac.
5. Should I make invoice without tax?
6. What if I don’t want to take VAT or CST registration but still I have to send that material to Jaipur.
Dear all,
I have my tin registered at X place /city now I want to issue invoice from Y place/city which is currently not registered with my tin…but will apply for adding of branch after wards. ..can I do that? If yea what to fill in form 402 for Material to be consigned for interstate to a customer in sez zone…pl help I m in big trouble. ….
Dear Anubhav,
Can you please let me know what is the right acceptable format of raising a Form ‘E1’ invoice….????
I get material directly from Philips and and endorse the goods receipt to party as it is delivered directly to my client’s destination. But what is or if any the correct way to make the billing invoice, which is accepatable to the sales tax dept…??? Can we open the CST charged by my principals i.e.Philips on my party e-1 billing , so that my bill can be passed accordingly by my clients accounts dept..??
Kindly clarify.
Thanks and Regards
Pawan
Sir, Based at Salem – Tamilnadu, I am purchasing equipment from Bangalore for which I am paying Excise Duty & VAT 2% against C form and I am billing that equipment with my profit and TN VAT 14.5 % to Granite manufacturing industry (100% EOU)in Tamilnadu.
I am planning to make it as E1 Sale (Sale in transit process) since I am not taking delivery of the goods.
In this case
What are all the taxes will be charged me by my supplier when I am purchasing?
How I can add my profit?
How can I bill it to my buyer?
Should I add any tax in addition to my profit?
Should I mark my invoice as E1 Sale?
And
In E1 sale, is there any provisions to get Excise Duty exemption for buyer since the buyer is 100% EOU manufacturer. Buyer has been claiming ED exemptions for other kind of machinery purchase. My supplier and buyer are registered with Excise. But I am not a registered one.
When and how much percentage of ITC is required to be reversed during stock transfer being done interstate
Dear Anubhav,
I am dealer (Pvt ltd Co.) registered in Tamilnadu and planning to sell electromechanical components (imported from abroad) to a registered dealer in New Delhi. for the below sale
My company A — Chennai (Tamilnadu)
Buyer company B — Delhi
End user company C — Delhi
1. Is this type of transaction eligible under section 6(2) of CST act?
2. Can my company A offer goods @ 2% CST against FORM – C to the buyer company B?
3. If the buyer B cannot issue me FORM – C , what is the rate of CST to be applied?
4. If buyer B wishes to sell the goods again to an another company C in Delhi and requires ‘E1’ form completed my company, Do i have to make change in CST rate or any other taxes involved? In this case what is the invoice to be sent along with the goods. Note : i do not want the end user to know what are the sale prices offered to my buyer.
Pls comment
Dear Anubhav Jain
Thank you very much for sharing this knowledge.
Dear Mr. Anubhav,
Thanks for the sharing the information related to Forms.
Pl let me know your views in following case.
I have purchase Goods from Silvass to Mumbai against C form.
My querry is
1. Part of the material is rejected by me & issued C form actually accepted quantity. Rejected quantity is sent to party on My excise Invoice with ref. to purchase Invoice. In This case, is there any form is to be received from My Silvassa Vendor.
2. I have issued C form for Entire quantity. Later on the part quantity is rejected, for this i returned goods through my Excise Gate pass mentioning the reference of purchase invoice. Should vendor is liable to issue any form in this case.
3. With ref. to Sr. No.2, I have issued C form for Entire material & vendor is not issuing any form for material returned. What would be my liability.
Pl comment.
Best Regards,
Vedprakash Sharma
Dear Anubhav
One correction in the provision relating to issuance of EI and EII. These forms are issued by the selling dealer, only when the goods are further sold by his purchasing dealer.
In the quoted example, Form EII will not be issued at all, because goods are not sold by C to any other dealer.
“In above example A of Mumbai will receive C form from B of Delhi & will issue declaration in E-I form to B of Delhi .Later on B of Delhi will issue declaration in Form E-II to C of Jaipur against which C will furnish C form to B (Delhi).”
This correction should be made in your above article, to avoid, any misunderstanding by personnel, who are reading this article for their understanding.
Dear Anubhav,
The example given by you regarding E1-EII transaction is not of E-II transaction. But it is of only E-1 transaction. In E-II transaction Four parties are involved, in which transfer of title through document happens between three parties.
Party A gives E-1 to Party B and take Form C from Party B
Party B gives E-2 to Party C and take Form C from Party C
Party C don’t give any Form to Party D but take Form C from Party D
Dear Anubhave,
Valuable information. Please keep posting such article on vat and excise.
REgards,
Gkishore
In this case you have to collect e1 form from your local dealer and issue c form to him
Check that the invoice is indorced properly with the name of main purchaser
Dear Mr. Jain Thanks for this Article .
If u r purchasing from with state then no requirement for c form .
As per my underatanding of ur question after purchasing u are selling to a customer in mumbai it will not effect anything
Dear Anubhav,
Good article. I wanted to know for the following case how it will be treated.
I am a trader in Bangalore. I am buying from another trader in Bangalore. But the goods are required to be delivered to one of my customer in Mumbai. And my vendor is charging me 2% against C Form. How will i issue C form to my vendor being in the same state and what forms must I collect from my vendor and what forms must I issue to my customer. Please advise.
Rgds-Sharath