C Form and applicability rules

[Asked by Guest]

1. Can the product bought from Delhi (by issuing C form at 2 percent rate) by our company based in Tamilnadu be sold to buyer company also in Delhi (Not having CST number)? Is such a sale (wherein originating seller and final buyer are in same state) permitted under CST laws?

2. What is the rate of tax (CST) applicable to the Purchase and Sales Invoices to / by our company in such a sale?

[YAGAY and SUN]

Dear Ramesh,

Physical movement of goods from one state to another state is mandatory for availing the concessional rate of tax under CST Act, 1956.  If this is not possible then you would have to charge full rate of tax without availing the concessional rate of tax against C Form.

Regards,

Team YAGAY & SUN

(Indirect Tax Consultants)

(Indirect Tax Consultants)

Dear Sir,

Thanks for your reply.

Yes we will be sending goods physically to Delhi after raising our Invoice.

My query can be further details as below

1. When originating supplier and final buyer are present in the same state, is it allowed under CST rules to issue receive C- Forms by another company present in some other state (Tamilnadu, as in our case) to buy and sell,  at 2 percent concessional rate of Tax?

2. When our customer does not maintain CST account ( though they have TIN number), can we supply goods at 2 percent C.S.T against receipt of their C- Form.

[rishi mohan]

In the above case, the buyer cannot purchase goods against "C" forms at the rate of 2 percent , as he is not having CST registration. You shall issue a invoice at full CST rate. Buyer is not eligible to purchase the goods against "C" forms.

AI Summary

Concessional CST entitlement requires physical inter-state movement and buyer CST registration; otherwise full CST must be charged.
The concessional CST rate against C Forms requires physical inter state movement of goods; absent such movement the concessional rate cannot be claimed. A buyer without CST registration is ineligible to purchase under C Form, and the seller must charge the full CST rate on the invoice.