Explanation on Different forms used in CST
Certain forms have been prescribed under CST which are used for different purposes. Form C is used for making interstate purchase at lower rate, Form F is used for transferring goods from one branch to another in different state and Forms E1 and E2 are used for interstate sale or purchase which are effected by mere transfer of document of title (subsequent sale).
What is Form F?
Movement of goods for purpose of sale from one state to another attracts Central Sales Tax. If however, the goods movement are on account of transfer from
Head office in A state to Branch office in B state OR
Principal/ Dealer in A state to Consignment Agent in B state who stocks and sells on behalf of dealer
then it is not deemed at be an interstate sale and levy of CST is avoided. In such a case, the receiving party has to issue a Form F to the sending party, which can be shown as proof to assessing authority.
To be able to issue Form F to the head office or Principal, the branch office/ consignment agent should acquire CST registration. One Form F can be issued for every one month.
Exception to this rule: Where goods are sold through branch office but the buyer was known before the goods were dispatched from the factory/head office/ principal, then it is deemed an interstate sale and levy of CST is attracted.
What is Form C?
When interstate sale has been made to a registered dealer and the goods sold are covered in the Registration certificate of the purchaser dealer, then CST @ 2% (concessional rate) is levied on the sale value. To avail the concessional rate, the purchaser dealer has to satisfy the following conditions:
He should obtain a Registration certificate from the VAT authorities of his state and
The complete list of goods which he intends to deal in or purchase should be mentioned in the Registration Certificate.
If either of the above 2 conditions are not satisfied, then CST will be levied at the rate at which goods are sold in the receiving state.
When the Purchasing dealer has obtained registration, he can issue a Form C to the selling dealer on the basis of which the seller will levy CST @ 2% only. This Form C can also be used as a proof to the tax authorities of the selling state.
Only 1 Form C will be issued for each quarter for each dealer.
What is Form I?
If the purchasing dealer is in SEZ zone, then no CST is levied and Form I is issued.
What is Form E1?
This form is issued by the dealer who makes the first inter-state sale during movement of goods from one State to another. This enables the purchaser to claim exemption from CST on the second inter-state sale during the movement of goods by transfer of documents of title.
What is Form E2?
This form is issued by the second or the subsequent seller when the goods move from one state to another in a series of inter-state sales by transfer of documents of title. This form enables the purchaser to claim exemption form CST on subsequent sale of goods
The different forms are briefly explained below with the help of a diagram.