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WHAT IS C-FORM

Akanksha (CA) (131 Points)

27 April 2009

Hii...........CAN ANYONE PLEASE TELL ME EXACTLY WHAT IS THIS C-FORM AND WHERE EXACTLY IT IS APPLICABLE???? ALSO FOR VAT RETURN PURPOSES WHAT IS ITS USE???

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9 Replies

Milan Somani (CA) (1456 Points)
Replied 27 April 2009

Form C is issued by a reg. dealer(purchaser) to seller of goods in case of CST so  as to charge him sales tax at lesser rate.

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BALASUBRAMANYA B N (CCI STUDENT....) (44679 Points)
Replied 27 April 2009

There are few specified conditions, fulfilling which a dealer can purchase goods in inter state trade & commerce at concessional rate of tax (3%). Against such eligible purchases only, the delaer is authorsied to issue C form.

use for cst....

Sandeep Keswani (Tax Consultant) (1064 Points)
Replied 27 April 2009

Hi Akanksha.

C FORM is issued by the purchaser of goods to the seller when goods are purchased from Outside the State in which purchaser carries on business. C Form is a form under the Central Sales Tax. It is given by the purchaser to the seller so that the seller will charge a lesser rate of VAT to the purchaser (upto 31-03-2009 is was 2%). If the purchaser fails to submit C Form to the seller, the seller is supposed to charge VAT at the rate prevailing in his / her respective state.

Take an Example:

A in Ahmedabad purchases goods from B in Bangalore. Normal rate of VAT in Bangalore (Karnataka) is say 12.50%. But if A submits C Form to B (i.e. goods are purchased against C Form), B shall charge ONLY 2% CST instead of 12.50%)

ysd prasad (Accounts officer) (250 Points)
Replied 27 April 2009

Hello Sandeep,

Thanks a lot for good explanation.

Sandeep Keswani (Tax Consultant) (1064 Points)
Replied 27 April 2009

Dear Mr. Balasubramanya, I think the present rate of CST against C Form is 2% and NOT 3%. Adding further, it is all set to reduce to 1% in this year and ofcourse will be totally abolished next year, as planned by the Finance Minstry 3 years ago. CST is being abolished to make way for Goods and Services Tax.