Page 218 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 12: Central Sales Tax

z is by transfer of documents. In this case, w will receive declaration in 'c' form from x and will Notes
issue declaration in 'e-i' form to x. Later, x will issue declaration in 'e-ii' form to y and receive
declaration in c form from y. Finally, y will issue declaration in e-ii form to z and will receive
declaration in 'c' form from z, which will complete the chain. If the chain is broken, CST will be
payable again.
Some provisions of c form applicable to e-i/e-ii forms - following provisions of c form are also
applicable in respect of e-i/e-ii form (a) one declaration for all transactions in one year (b)
separate declaration for each financial year (c) indemnity bond if form is lost (d) issue of duplicate
form (e) submission at any time before assessment (f) like c form, the e-i/e-ii forms are mandatory
and sales tax concession is not available if the required form is not submitted.

Declaration in f Form

We have seen that when the goods are despatched to another state on consignment basis or to
branch of dealer in another state, there is inter state movement of goods but there is no sale and
hence no CST is payable. This provision is often misused and goods are despatched in the garb
of consignment or branch transfer though Actually it may be a sale. Hence, section 6a(1) of CST
Act provides that when a dealer claims that the inter state movement of goods is not a sale, he
has to prove the same. (in legal terminology, it is called that 'burden of proof' is on the dealer).
For this purpose, he must produce a declaration in 'f' form received from consignment agent or
branch office in another state.

As per section 6a(1) as amended w.e.f. 11-5-2002, submission of f form is mandatory to prove
stock transfer. Otherwise, the transaction will be treated as 'sale' for all purposes of CST Act.
Goods can be sent to other state for further manufacture - goods can be purchased at concessional
rate if the goods are for use in the manufacture. Thus, after manufacture, the sale need not be in
the same state. In Indian aluminium co. Ltd. V. Sto - (1993) 90 stc 410 (ori hc db), the company was
manufacturing aluminium ingots at hirakud, orissa. These were despatched to plants of the
company in other states for further manufacture of aluminium coils, sheets etc. Plants in other
states were sending 'f' forms. The department accepted the forms without any objection.
One form f covering receipts during the month can be issued. If space in form f 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.

Certificate in Form ‘h’

Sale during course of export is exempt from CST. As per section 5(3) of CST Act, penultimate sale
is also deemed to be in course of export and is exempt from CST. Dealer Actually exporting the
goods has proof of export like customs documents, bank certificate, airway bill/bill of lading,
shipping bill etc. However, the penultimate seller does not have any direct evidence to prove
that his sale is exempt from tax. In such cases, the Actual exporter has to issue a certificate to the
penultimate seller in form h. The blank 'h' forms are to be obtained from sales tax authority by
the final exporter.
Sez unit has to submit i form - as per CST rule 12(10), sez [special economic zone] unit will
supply i form. In such case, supplies to unit in sez made by dealer outside special economic zone
will not be liable to CST.

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