What is C - Form
C-Form is a certificate issued as proof of CST Purchase. This form can be obtained from sales tax dept. The seller has to obtained this form – C from the purchaser and show it to the sales tax dept to get tax exemption. In case if the purchaser does not release the Form – C the seller has to pay the Tax at the time of sales tax assessments.
Form C is issued by the dealer for purchasing goods from the dealer out side the state in which he resides the effect can be understood my looking at following example If Mr A Registered Dealer in Hyderabad (AP) wants to purchase goods from Mr B a registered dealer in Mumbai.Mr B who is selling the goods will charge VAT @ 4% or 14.5% on the goods if Mr A issues him “C” Form then Mr B should Charge him CST @ 2% so Mr A is SAving Tax.
It will be safe for the seller if he can get a D.D. for the tax amount of the goods which is sold to the purchaser. Because sometime the purchaser fail to provide the form – C to the seller due to unknown reasons, at this time this D.D. which is collected will be off much helpful to the seller.
- Goods as being intended for re-sale
- For use in the manufacture or processing of goods for sale,
- For use in telecommunication network or in mining or
- For use in generation or distribution of electricity or any other form of power
- Container or other materials intended for the packing of goods for sale ( i.e. primary packing materials )
- Container or other materials used for packing of any goods mentioned in para (i) or (iv) above ( i.e. Secondary packing materials)
Purchase of capital goods by a contractor against c form
To Purchase a capital goods under C form, the following conditions should be satisfied by a dealer
- He should be Manufacturer and using the machinery for such manufacture of goods which are mentioned in his CST registration certificate and / or should give intimation to the prescribed officer within 30 days of such purchase.
In your case the Dealer is registered with CST , if in the Work Contract, there is a VAT component is paid by the Dealer then he is eligible for purchase under C form.