Dispute in responsibility of issuing C Forms

[Dipu Joy]

Dear Sir

Fact of the case: 

I work for a SPV (Special Purpose Vehicle) registered at Mumbai which is carrying out certain modifiaiton works in a Sugar Factory at Kolhapur, Maharashtra. We have an Agreement with Sugar Factory for the Ownership of the Equipment till the completion of BOOT period and transfer of ownership of the equipments to the Sugar Factory

We have placed purchase order on a company in Bengaluru for the procurement and supply of equipments & materials required for the Modification in the Sugar Factory. Equipment supplier has raised invoices on us as an Owner and indicated Sugar Factory as the Consignee of goods

Query: Who can issue the C forms to the Supplier: SPV as an Owner OR Sugar Factory as a user of the goods to which is inturn producing sugar. As per CST Act, both parties, SPV and Sugar Factory is not fully qualifying to issue C forms to the Supplier

Kinldy advice

Regards

Dipu Joy

[Rama Krishana]

In simple terms where more than two steps are involved in movement of goods leading to issuance of C form, the parties who are immediate in contact which other in terms of supply of goods would be the issuing and receiving C forms. Therefore, as I understood the issue, SPV is buyer of goods from the supplier and therefore SPV should issue Form C to the supplier. An arrangement between SPV and Sugar Factory may be seen as separate transaction or E1 / E2 transaction.

 

AI Summary

Responsibility to issue C forms: immediate buyer relationship determines which party must issue the form to the supplier. Responsibility to issue C forms follows the operative supply relationship: where the SPV is the buyer and the sugar factory only the consignee and eventual transferee, the SPV should issue Form C to the supplier. The downstream transfer to the sugar factory may constitute a separate transaction or an E1/E2 transaction for classification purposes.