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Arun J ain
posted on 25 September 2014
What i s C Form? And what are its
impli cations in current scenario?

Provision of C Forms is in Central Sales Tax
Act,1956. As the name suggest it is to be
controlled by Central Government as all
revenue goes to Central Govt. But in reality it
is controlled by individual states and creating
a lot of problem.

What is C Forms and when it i s to be
issue?

When a registered dealer purchase goods
from outside of his state, he gets rebate of specific percentage of sales tax on the ground that it will
declare this purchase to his state department and issue the C Form against those invoice.

For Eg. If ABC Pvt. Ltd. based in Gurgaon ( Harayana) is registered with Sales Tax Department of
Haryana make a purchase of Machine Tools from a Delhi Registered Dealer J aibros Tools for the
value of Rs.100,000.

Machine Tools are traded at 5% VAT in Delhi hence central sales tax would be 5% but by virtue of
Central Sales Tax Act, 1956 ABC Pvt. Ltd. Get the rebate of 3% of Sales tax portion and pay only
2% along with promise to issue forms of 3% Value to J aibros Tools.

So J aibros Tools issued invoice of Rs.1,00,000 (Basic value) +Rs.2000 (CST) and required 3% of
C From from ABC Pvt. Ltd.

In the same example above J aibros Tools is also making purchase under CST Act ,1956 and
promising to issue C Form.

Now Come to the point,

Both ABC Pvt. Ltd. And J aibros Tools are required to furnish the details of Purchase under the act
Central Sales Tax Act, 1956 in their quarterly return of Sales Tax and Sales Tax Department will
provide the C from to dealer so that dealer can submit it to its creditors.

Now J aibros Tools filed its return properly and asked for C forms from the Sales Tax Department to
issue to its creditor but J aibros Tools denied for C Forms on the ground that they have not
submitted its C forms against the rebated sales tax sales they made to ABC Pvt. Ltd.

When they approach ABC Pvt. Ltd. They said they are facing same problem so they can not
provide the C forms to J aibros Tools, it conclude that everybody has to provide C Forms to each
other but unable to get from sales tax department on the ground they have not submitted forms.

How govt. Can Resolve i t?

Every dealer who is making declaration of sales under CST Act should be able to get the C Form
no matter wheather it submitted its C Form and it would definitely enable him to get his C Form
because every issuer will have a receiver.
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Hetvi Sheth 25 September 2014
Though every dealer should be able to get the C form from the issuer, it is a
practical difficulty because of which the seller has to face consequences at time of
sales tax assessments.
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