K. V. Hari Babu, ACMA, CS
Telecom Infrastructure Service Providers – Entitled to procure goods against ‘C’ Forms at concessional rate of CST @2% – Goods purchased are used in the telecommunication network and therefore covered by Section (1) and 8(3)(b) of the CST Act – Petitions allowed – Penalties levied on the appellants set aside.
Held – Purchase of goods by the petitioners from outside the State, comprising goods specified in the certificates of Registration under the CST Act granted to them, against issue of ‘C’ Forms and where the goods have been employed in erection and maintenance of cell phone towers which are integral to Telecommunication Network, fall within the ambit of Section 8(1) read with Section 8(3)(b) of the CST Act and are entitled to be taxed accordingly. The fact that the goods purchased by the petitioners were neither sold nor used in the manufacture of goods for re-sale does not constitute violation of the ‘C’ Forms. Consequently, levy of penalty, on the factual parameters apparent on the record of these cases, is unsustainable.