C Form for material is supplied excess

[saket s]

Whether C Form can be issued even material is supplied excess than PO/ Contract?

We had sold excess material to customer / client to complete order. Supplied quantity was more than PO quantity. Now the customer is refusing to issue Form C arguing that we had supplied excess material.

Pls let me know if there any case law on this issue.

Thanks

Saket

[MUKUND THAKKAR]

please clear the following point.

1. your customer will pay you excess amount against supply of excess material ?

[saket s]

No, the client is not paying anything extra. The excess materials were supplied to complete the desired work.

[MUKUND THAKKAR]

At the end of year non receipt of payment against this supply will be write off..

As per my view convert this supply as free supply.. and collect c form of balance amount.

Generally, VAT is to be collected on sale of goods to a person in a consideration..

If goods are given at free of cost, does not attract VAT. But if It is dutiable product, then it has excise duty liability. which you had paid..

[YAGAY andSUN]

If you treat this material as FOC supply, then Input Tax Credit needs to be reversed proportionately in addition to reversal of CENVAT credit.

[Ganeshan Kalyani]

In my view Form C is not required for free of cost material. This is because you will not be charging anything for the excess material supplied. As such the sales register will not show the amount of excess material supplied. Hence no need to collect form c. Thanks.

AI Summary

Inquiry on Issuing C Form for Excess Supply: Free Supply Suggestion to Avoid VAT and Form C Requirement. A party inquired whether a C Form can be issued when material supplied exceeds the purchase order quantity. The customer refused to issue the C Form, arguing the excess supply was not part of the original contract. Responses suggested treating the excess as a free supply, which would not require VAT or Form C, as VAT is applicable only when goods are sold for consideration. If treated as free, Input Tax Credit and CENVAT credit should be reversed proportionately. It was advised that free supplies do not necessitate a C Form since they are not reflected in the sales register.