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prashant bagul (service)     20 November 2011

Issue of c form invoice date? or material receipt date issue

There is a lot of confusion regarding the issue of Form "C" whether on Invoice date of material receipt date especially from Issuing Companies.

The Seller often asks for C form based on the Invoice date and many customers are debating that since the material is received by them in next quarter or especially in case of year end transactions wherein the material is received by the Customer in different financial year say in April end etc. In such case they are not ready to issue form c in previous financial year. Despite of insisting that the Invoice date is the criteria for issue of form "c" .they say that it will be issued only in next financial year. i.e.material receipt month.

Kindly advise especially year end transaction issue.


Is there any case law?





 22 Replies

V.Devananda Narasimham (Advocate)     06 February 2012


       Mr. Prashant,

       This is a debatable issue. I am also trying to find out a solution in order to follow a  procedure in this case. It is my considered view that C form should be issued on the date of Invoice of  the supplier on the following reasons:-

1.      Sec 2(b) of the CST Act, 1956 defines a dealer means any person who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly for cash, or for deferred payment, or for commissions, remuneration or other valuable consideration, Sec. 2(d) defines goods, Sec.2 (g) of the said Act defines sale, and Sec. 3 defines Interstate sale or purchase.  According to Sec.6 (1), a dealer is liable to pay tax on sale of goods in the course of Interstate trade or commerce. So seller of goods is liable to pay tax on interstate transaction. Sec. 8 (1) prescribes lower rate of tax. The liability to pay tax is on the dealer who sells the goods. A registered dealer can collect tax according to CST Act & Rules made there under. It is not necessary to collect tax but he is liable to pay tax under the Act in which State he is registered.

2.      If the sale is to a registered dealer the rate of tax is 2% against C form or rate applicable on such goods inside the State from where the goods are sold, whichever is lower.  According to Sec.8 (4) (a), a purchasing dealer is entitled to get concessional rate of tax at 2%, if he submits C form declaration to the selling dealer as prescribed in the Act and Rules framed there under. As stated earlier, selling dealer is liable to pay tax on interstate sale in the State of origin of the goods available for movement. If the purchasing dealer is not providing C form declaration to the seller, full rate of tax due on the sale turnover is liable to pay by the selling dealer in the appropriate State. It was held in Commercial Tax Officer Vs. Kowin Conductors (1998) 110 STC 472 that in the absence of C form declaration full rate of tax is payable.

3.      Now all the CST statutory declaration forms can be down loaded from the web site of Commercial taxes department of each State. In Kerala, every dealer is liable to upload his purchase details of each month including interstate transactions in his monthly return and he can generate the C form from the web site. Now C form shall be issued in quarterly basis and no pre-printed forms are available..

4.      It is my considered view from the above discussions that a purchasing dealer who is required to avail concessional rate of tax @ 2%, he should issue C form to the seller based on his invoice in order to limit his tax liability in the State of origin. If the purchasing dealer is not providing C form as stated in CST Rule 12(1) specifying the particulars of bill or cash memo or challan such as date, Number and amount, there is every chance to reject the C form by the assessing authority of the seller. In such circumstances, the seller is liable to pay higher rate of tax, interest and penalty. It will create unnecessary litigation between the purchaser and seller. It is most important to note that seller is granting the concessional rate and he is liable to pay tax in the absence of proper C forms. In order to maintain better business relationship, the purchasing dealer is liable to issue the C form on the invoice date. It may kindly note that issue date of the C form is immaterial in this case.

Arun (AVP - Finance)     27 February 2013


Your note is well written and do post these kind statements for our reference.


V.Devananda Narasimham (Advocate)     04 March 2013

Thanks, In order to develop an attitude of such a kind, it is hgihly necessary such a mind to appreiciate others for efferts taken by him for others.  Ask your doubts for discussion and allow me also to respond

shirish bajpai (business)     29 April 2013

dear sir


please  guide me some material issued to march 1st week and send the material april last week  we issued the form c which qtr and how to reconcile interstate sales which year

shirish bajpai



V.Devananda Narasimham (Advocate)     16 May 2013

In order to provide proper reply, the question should be self explanatory, other wise misunderstanding will cause danger or harmfull in tax cases. This is a public forum  required seriousness. Please explain  your doubt properly. 

mannu077 (Sr. Manager)     08 August 2013

Sir, I have purchase the goods on 28th June 2013 from Delhi, the invoice reached home through courier after 3 days, applied for form C  on 3rd July 2013 and recieived form C from the authority on 5th July 2013. Send the Form C to Delhi for transportation, the material was received at my location ( Agartala) on 25th July 2013. Now under which quaterly should I apply.....pls suggest

V.Devananda Narasimham (Advocate)     17 August 2013

If the purchase invoice date is 28-06-13, C form should be provided including the purchases in April-June quarter. Please refer my post in this forum.

mannu077 (Sr. Manager)     19 August 2013

If there is two different suppliers, from where the goods are purchased, then how many form c is required. Can i covered no. of transactions for two different  suppliers under one C form ? or i have to use seperate c form for seperate suppliers 

V.Devananda Narasimham (Advocate)     21 August 2013

 In order to get concessional rate of tax @ 2% on an interstate purchase from a dealer, you should provide such declaration form to the seller at least on quarterly basis only to avoid difficulties in preparing the same between two regular dealers.  If the seller is insisting C form for each transaction, the purchaser should provide the same to avail reduced rate of tax on interstate purchase.How it is possible to issue one C form to different suppliers.


khajamoinuddin (Executive)     22 November 2013

Dear Devananda Sir,

In your explanation to Mr. Prashant regarding C Form issued in different quarter.

If a Buyer has filed return for 1st quarter and after filing return the buyer received Invoice & Material from his supplier of 1st Quarter i.e. in 2nd quarter. In such case for which quarter C Form will be issued by the buyer. Also please explain whether there will be any problem relating to the Return filed for 1st Quarter.

And also if the case is for One financial year to another.


V.Devananda Narasimham (Advocate)     23 November 2013

 Mr. Khaja,

 When a sale or purchase has taken place, the dealer who sells the goods is liable to pay tax to the State he situate. You are purchasing the goods from such a dealer availing concessional rate of tax  against C form declaration under the provisions of the CST Act instead of paying local rate of tax applicable to those goods under that State law. The selling dealer is liable to pay tax under the provisions of the appropriate State Act. You are availing the concessional rate of CST with a condition that C form will be given against said invoice. Now a days, all the formalities are doing electronically online. If you are receiving the goods in second quarter along with  invoice, you can account the invoice either in previous or subsequent quarter and generate C form specifically stating the purchase invoice number, date and amount. Quarterly specification is applicable only for including  more invoices in a single C form, ie, you can issue a single C form for the purchases effected during that quarter from such seller. If you are accounting the invoice during the second quarter, you should generate single C form without clubbing  other invoices. However it is the duty of the buyer to provide C form against the invoice issued by the seller specifically stating the invoice number, date and amount irrespective its date of receipt or  accounting. 

Dileep (Accounts In Charge - South Region)     29 November 2013

Dear Sir,

We are having a standing Instruction regarding the Interstate purchases with our Vendors.

I.E. Updating the materials only for the Good-stk. Since the material is electronic component, chance for damage or breakage is high.  If we are updated the materials only for the Good-stocks; Our Purchase register will show only the Good-stk values.

The thing is ; While issuing the C Forms against those Invoices, Which value should we have to consider? As per Invoice value or updated value? 

If we are issued as per Invoices, difference will reflect on Purchases accounted and Purchases Invoices.

Does it will be acceptable to our Vendors (ST DPT); if we are issued as per the Good-stock updated as our system?

Pls suggest……


With Thanks n Regards

Dileep Madhavan


Cema Lighting.

V.Devananda Narasimham (Advocate)     30 November 2013


Please explain your doubt clearly. What you mean by updated value, updating material. According to CST Act, the selling dealer is liable to pay tax based on his invoice. He is the person taking risk while allowing concessional rate of tax against C form. It is the duty of the seller to satisfy his assessing authority in respect of  concessional rate of tax allowed in his tax invoice. According to me the seller should bring the materials using delivery note based on your  purchase order, inspect the goods, quality and issue goods acceptance receipt in order to prepare tax invoice and issue C form thereon in order to avoid disputes and transparent accounting. If you requires further clarity  please make your question clear.

Thank you 

Dileep (Accounts In Charge - South Region)     04 December 2013


Thanks for the information.

Since the materials are coming through commercial tax check post, is it viable the consignment only through Delivery Note and Without Tax invoice?


Is the Check post authorities may enquire about the values for the same..?



With Warm Rdgs

Dileep Madhavan

Cema Lighting.

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