Sale to government department - burden of additional sales tax

[Asked by Guest]

We are Govt Suppliers of electrical goods in NOIDA. As per Govt. Notification ,Sale to Government is equivalent to sale to unregistered dealer w.e.f. 1-4-2007. Is the concept of Form 'D' abolished? Whether Govt Departments will be given provision to get themselves regisered in Sales Tax dept. to issue Form 'C'? Suppliers who have received orders from Govt Dept along with Form 'D' surely can not use these form on their sale in financial year 2008-08. Is this right? In U.P, rate of local sales tax is 10 %. So who will bear the brunt of this additional 6 % sales tax??

If the government department fulfills the conditions of CST Act (like resale of goods), they can get themselves registered and avail the benefit of "C" form. Otherwise, local sales tax is to be paid. To solve the problem, that who will bear the differential tax, you have to take the issue with the concerned buyer only. There is no option.

AI Summary

Sale to government departments treated as sale to unregistered dealer; C form registration needed to avoid local sales tax burden.
If a government department meets CST Act conditions such as resale, it may register and issue a C form to permit inter-state sale benefits; otherwise the supplier must pay local sales tax on the sale. Commercial parties must negotiate who bears any additional tax burden, as there is no statutory option for the supplier to avoid local tax where the buyer does not qualify for or furnish a C form.