C Form and applicability rules

[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 andSUN]

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)

[Guest]

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 Rate Inapplicable for Intra-State Sales; Full Rate Applies Without CST Registration Under C Form Rules. A company in Tamilnadu queries about selling goods bought from Delhi, using a C Form at a 2% rate, to another company in Delhi that lacks a CST number. The concern is whether such transactions are permissible under CST laws and the applicable tax rate. An expert clarifies that for a concessional CST rate, goods must move between states; otherwise, the full tax rate applies. Further, a buyer without CST registration cannot purchase goods at the concessional rate with a C Form, necessitating the full CST rate on invoices.