EXCESS VALUE DECLARED IN FORM-C. IMPLICATIONS.

[Sadanand Bulbule]

Dear Sir

While issuing declarations in Form-Cunder Section 8(4) of the CST Act,1956, the buyer of the goods has mentioned excess value over and above the actual transaction value. Based on such information of excess value, the assessing authority proposes to levy CST on the excess value too discarding the turnover of actual interstate sales.

What is the remedy for this kind of proposal to levy tax on excess value, despite non- existing interstate sales to that extent? Pl provide judicial rulings on such issue,if any.

Regards.

[Ganeshan Kalyani]

Invoice copy, Goods receipt note, LR copy, customer ledger account. All these document will help you to substantiate the true value of the purchase against Form C. There can be clerical error committed by the customer resulting in issuing of higher value Form C. The will not justify the transaction alone. Try to convince the tax authority. They are too bound by their internal audit and accountable for the assessment conducted by them. Hence, they need documentary evidence to back your contention. If they feel the comfort they will accept your stand based on abovementioned documents.

[Sadanand Bulbule]

Thank you so much Sirji. 🙏

[YAGAY andSUN]

Assessing authority cannot make any addition on the basis of buyer's inadvertent mistake, if C form is issued at higher value rather the sale invoice's value. It is settled legal position.

[Sadanand Bulbule]

Sir,

Thank you so much for your continued efforts to throw more light on the issue.
Regards.

AI Summary

Excess value in Form C: supply invoice and transport records to prevent assessment on inadvertent buyer overstatement. Excess value in buyer issued Form C cannot alone increase seller's taxable interstate turnover; the seller must rebut by producing sales invoices, goods receipt notes, LR/transport documents and customer ledger entries to reconcile Form C with actual invoice values. An assessing officer should not make additions based solely on a purchaser's inadvertent overstatement where cogent documentary evidence establishes that the excess does not correspond to actual interstate sales.