issue of 'C' form declaration

[dinesh k s]

whether the c form declaration can be issued on goods which are covered in the registration certificate for sale, which are purchased in the course of interstate trade and commerce and sold locally as well as interstate, along with sale some extra quantity of the said goods are also given as free quantity depending upon scheme formulated by the dealer. Commercial tax department is issuing penalty notice stating that to the extent goods issued free to cusotmers on sales will not be eligible for c form declaration. pls. advise.

[YAGAY and SUN]

Dear Dinesh,

The VAT/CST Department is 100 percent right in their contentions.  You cannot use the C form for the goods which are being disposed off free of cost.  Please also check the format of the C form on which it is mentioned that you may use the C form for following purposes, namely: -

1. for use in manufacturing of finished goods
2. for re sale
3. for Generation of electricity
4. for packing of goods etc.

It is nowhere mention that you would remove goods free of cost.

In our view you would have to pay the differential tax to theVAT/CST Department, if any with interest at appropriate rate and alongwith penalty if any.

Regards,

Team YAGAY & SUN

(Indirect Tax Consultants)

AI Summary

C form eligibility: free-of-cost supplies are ineligible, risking differential tax, interest and penalty for dealers.
C form eligibility is confined to specified commercial purposes listed on the form (manufacture, resale, generation of electricity, packing, etc.) and does not cover goods issued free of cost; goods given away free therefore cannot be treated under C form and may attract assessment of differential tax with interest and penalty.