Telangana : c form in case final product is exempt

MANOJ (Querist) 20 July 2018 This query is : Open
Respected All,

Can anyone let me know whether issuing C Form in Telangana is not allow, in case final product manufactured ,is exempt from VAT & CST.

P Lease quote any case law.

Thanks,

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P. Venu (Expert) 21 July 2018
The query lacks clarity.

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MANOJ (Querist) 23 July 2018
Dear Sir
Final product manufactured by Assessee is exempt from VAT & CST.
Commercial Tax Department argued that government is losing revenue if assessee applies for C Form.
This is because at the time of purchase against C Form assessee pays 2% CST whereas after the same uses in manufacture of Final product , assessee do not pay any tax since it is exempt.
Had assessee purchases the same material from the state it would have paid 14.5% VAT. Thus there is loss of revenue of 12.5%.
Hence , assessee cannot apply C Form.
Is the view of the Department correct