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issue of Form F under CST act

MNarayanan (Book- Keeper) (169 Points)

25 August 2009

under what circumstances Form F should be issued to Interstate Supplier.what are the other documents to be issued along with Form F.How it should be reported in Sales Tax returns

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Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14497 Points)
Replied 25 August 2009

MANDATORY NATURE OF FORM F FOR STOCK

TRANSFER, CONSIGNMENT SALES AND JOB WORK ?

The Hon’ble Supreme Court ,recently, in M/s Ambika Steels Ltd.

heard the bunch of petitions arising out of the Judgement of the Hon’ble

Allahabad High Court being the same petitioner , i.e.

Ltd. reported as Ambica Steels Ltd Vs. State of U.P.

35)-1.
M/s Ambika Steels2007 NTN ( Vol
Ambica Steels Challenged the circular dated 28-11-05 of

Commissioner of Trade Tax U.P. stating that Form ‘F” is required to

filed in respect of all transfer of goods which are otherwise than by way

of sale and also applies to all goods sent or reciept for job work goods

returned .

Section

“6-A. Burden of Proof, etc., in case of transfer of goods claimed

other than by way of sale.
6-A
(1) Where any dealer claims that he is not liable to pay tax under

this Act, in respect of any goods, on the ground that the movement

of such goods from one state to another was occasioned by reason

of transfer of such goods by him to any other place of his business

or to his agent or principal, in the case may be, and not by reason

of sale,

was so occasioned shall be on that dealer and for this purpose

he may furnish to the Assessing Authority,

prescribed time or within such further time as that authority

may, for sufficient cause, permit

signed by the principal officer of the other place of business, or

his agent or principal, as the case may be, containing the

prescribed particulars in the prescribed form obtained from the

prescribed Authority, alongwith the evidence of dispatch of such

goods.

and if the dealer fails to furnish such declartion ,then, the

movement of such goods shall be deemed for all purposes of this

Act to have been occasioned as a result of sale.

(2) If the Assessing Authority is satisfied after making such inquiry

as he may deem necessary that particulars contained in the

declaration furnished by a dealer under Sub-Section(1) are true,
the burden of proving that the movement of those goodswithin the, a declaration, duly filled and

he may, at the time of , or at any time before, the assessment of

the tax payable by the dealer under this Act, make an order to

that effect and thereupon the movement of goods to which the

declaration relates shall be deemed for the purposes of this Act

to have been occasioned otherwise than as a result of sale.

EXPLANATION

to dealer, means the authority for the time being competent to

assess the tax payable by the dealer under this Act”.

* Bold portion brought by amendment.

Hon’ble Allahabad High Court in

U.P.

The submission that the goods sent for job work or received for doing

job work , do not amount to sale would depend upon the contract

entered into between the parties and would be the subject matter

of examination by the Assessing Authority . Even otherwise , under

section 2(g)(ii) of the Central Act, transfer of goods used in execution

of work contract is treated to be a sale. If the petitioner claims that

it is not liable to tax on the transfer of goods from U.P. to ex U.P. ,

then it would have to discharge the burden placed upon it under

Section 6A by filing declaration Form F. It would be immaterial

whether the person to whom the goods are sent for or received

after job work is a bailee. As held b the Apex Court, under the

statutory provison the requirement is that if any person claims

that he is not liable to pay tax on transfer of the goods from one

State to another, he has to furnish declaration Form F. This would

be applicable in a case of goods returned also.

And for this refered and relied on the judgment of the Hon’ble

Supreme Court

In

STC (S.C.).
:- In this section, “Assessing Authority”, in relationAmbica Steels Ltd Vs. State of2007 NTN ( Vol 35)-1 held as below :-Ashok Leyland Ltd. vs. State of Tamil Nadu (2004) 134
Para 44-

Section 6-A provides for exception as regard the burden of proof in

the event a claim is made the transfer of goods had taken place

otherwise than by way of sale . Indisputably , the burden would be

on the dealer to show that the movement of goods had occasioned

not by reason of any transaction involving sale of goods but by

reason of transfer of such goods to any other place of his bussiness

or to his agent or principal , as the case may be. For the purpose of

discharge of such burden of proof , the dealer is required to furnish

to the assessing authority within the prescribed time a declaration

duly filed and signed by the principal officer of the other place of

bussiness or agent or his principal. Such declaration would contain

the prescribed the particular in the prescribed form obtain from the

prescribed authority ..... In the event if it face to furnish such

declaration, , by reason of legal fiction , such movement of goods“ There exists difference of opinionand in the last para concluded stating that “ we are informed. In such an eventuality it would
On going through the last para of the judgment of the Apex

Court quoted hereinabove , it may be noted that the Supreme Court

has left the matter at the discretion of the assessing authorities who

has no other means but to follow the dictum of the Ambika Steels

Ltd.(supra) laid down by the Allahabad High Court.

Therefore, Form ‘F’ is required if goods are sent for job work and

are returned after the job including those case were in the transaction

of the sale goods are returned though within the prescribed period.

would be deemed for all purposes of such Act to have occassioned

as a result of sale.

Against the above judgment the matter was challenged before

the Hon’ble Supreme Court in Civil Appeal No- 4970 of 2008 and was

decided on dt. 31-03-09 . The case was disposed of affirming the findings

of the Hon’ble Allahabad High Court , as above :-

In this judgment the scope and applicabilty of section 6-A of the

Central Sales Tax Act, 1956 , was perhaps not argued . The Apex

Court took note and observed

between the various Sales Tax Collectors in the country and ,

therefore, since the appellant in now ready to file Form “F” we are

directing the Assessing officer not to impose penalty /interest, in

the re-assessment proceedings as one time waiver. Needless to add

that waiver of penalty and interest shall be admissible only on

Form “F” being furnished by the assessee within the prescribed

period”

that certain State(s) within whose jurisdiction the transferee is

located is /are not issuing F Forms

be open to the assessing officer to complete re-assessment

proceedings on its own merits after examining the transaction

between the parties, keeping in mind the circumstances that the

assessee is not in a position to obtain the F- Form, for no fault of

his.

V/s State of U.P. and others in Civil Appeal N0. 4970 of 2008,

decided on 31st March 2009, (Reported in 2009 NTN (Vol. 39) 263)

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Surajit Ray (Accounts Officer) (22 Points)
Replied 30 January 2010

may I get any of u'r advice regarding the treatment of return of stock transfer made to the branch(i.e. inward stock ) in D/Form "F" Surajit

vaibhav moreshwar Naik (Accounts Executive) (22 Points)
Replied 13 April 2010

Dear Sir/Madam,

we are transfereing materail to branch through Branch Transfer Invoice. in this invoice, stock item value showing higher value than purchase value for insurence purpose.( but not actual sales price of H.O )

After this branch passed the inward entry of stock item through Stock Journal & giving value as per Branch transfer invoice.

suppose we want to make p & L A/c, Balancesheet of branch & H.O.what is the correct entry of this transaction?.

Reagrds,

Vaibhav M Naik