Issue of c forms by 100% eou it company

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Pardeep Gupta (Querist)
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20 March 2014 Dear Experts,

We are an IT company in development of software in Chandgiarh IT park registered under sales tax. We are an 100% export oriented unit registered under STPI. We procure various material for development of soft wares. Can we obtain C form from sales tax department for issuing to the vendor in respect of purchases though we do not have any domestic sales.

Thanks in Advance
Pardeep

Pardeep Gupta

Pardeep Gupta (Querist)
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31 March 2014 Dear experts,

Can anyone answer on this please?

Regards
Pardeep

Pardeep Gupta

Pardeep Gupta (Querist)
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03 June 2014 Can any expert answer this please?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 For a 100% Export Oriented Unit (EOU) registered under the Software Technology Parks of India (STPI) scheme, the issuance and use of "C" Forms under sales tax laws can be complex due to the nature of the EOU’s operations and the specific tax regulations governing exports. Here's a detailed explanation regarding the issuance of "C" Forms and the applicability for an EOU:

### Understanding "C" Forms and EOUs

1. **Purpose of "C" Form:**
- **Eligibility:** "C" Forms are used to claim concessional VAT rates on inter-state purchases. They are typically used by businesses making inter-state purchases for resale or manufacturing taxable goods.
- **Exemption:** As a 100% EOU, your primary business activity is exporting goods or services, which usually qualifies you for various tax exemptions and benefits.

2. **Applicability to EOUs:**
- **Export-Oriented Units:** EOUs, including those under the STPI scheme, are primarily focused on exporting their products or services. As such, they are generally eligible for certain exemptions and benefits, including exemptions from VAT/CST on purchases meant for export purposes.
- **VAT/CST on Purchases:** EOUs usually do not have to pay VAT/CST on their purchases of goods intended for export. Instead, they may benefit from various exemptions or refunds.

### Issuance and Use of "C" Forms

1. **Obtaining C Forms:**
- **Eligibility for C Form:** Typically, EOUs do not need to use "C" Forms to claim concessional VAT rates because their transactions are generally zero-rated for VAT/CST. The primary requirement is to ensure that your purchases are for export and you follow the correct procedure to avail of exemptions.
- **Sales Tax Registration:** Ensure that your sales tax registration is up-to-date and that you comply with the specific regulations for EOUs in your state.

2. **Process for Issuing C Forms:**
- **C Form Application:** If, despite being an EOU, you are required to obtain "C" Forms for certain transactions, you would need to apply to the sales tax department. This typically involves:
- Providing details of your EOU status and export activities.
- Submitting necessary documentation proving that the purchases are intended for export.
- Completing the required forms and following the local sales tax department's procedure.

3. **Vendor Transactions:**
- **Issuing to Vendors:** If you can obtain "C" Forms, you would issue them to your vendors to claim concessional VAT rates on inter-state purchases. Ensure that your vendors are aware of your EOU status and are able to process the "C" Forms accordingly.

### Tax Exemptions and Refunds for EOUs

1. **Export Exemption:**
- **Zero-Rating of Exports:** For EOUs, exports are typically zero-rated under GST or VAT/CST. This means that you do not have to pay tax on your export sales, but you can claim a refund of the input taxes paid on goods and services used in the export process.

2. **Refunds and Claims:**
- **Input Tax Credit:** Under GST, you can claim a refund of the Input Tax Credit (ITC) on inputs used for exports. This is often a more straightforward process compared to obtaining "C" Forms.
- **Documentation:** Ensure that you maintain proper documentation for all export-related transactions and purchases to support your claims for refunds or exemptions.

### Summary

For a 100% EOU, obtaining and issuing "C" Forms may not be necessary because your transactions are generally exempt from VAT/CST due to the export nature. Instead, focus on ensuring that you comply with the specific procedures for claiming exemptions or refunds on your purchases. Consult with a tax advisor or the sales tax department to understand the exact requirements and procedures applicable to your situation.