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You are here: HomeNews and EventsUSE OF FORM ‘’C” OR FORM “D” IN RESPECT OF PURCHASE OF NON GST GOODS

USE OF FORM ‘’C” OR FORM “D” IN RESPECT OF PURCHASE OF NON GST GOODS

USE OF FORM ‘’C” OR FORM “D” IN RESPECT OF PURCHASE OF NON GST GOODS

 

Lot of manufacturers are of the view that they can use Form C, prescribed under the Central Sales Tax Act, 1956, for purchase of Diesel Oil for use by them in manufacture or processing of goods which are covered under the goods and services tax (GST). This view is not correct due to following reasons:

1.       Vide the Constitution (One Hundred First Amendment) Act, 2016, article 269, of the Constitution has been amended. Article 269 is related to levy of tax on inter-State sale of goods. By this amendment, goods, which are covered under goods and services tax,have been excluded from the scope of levy of the Central Sales Tax. Currently, petroleum crude, high speed diesel, petrol, aviation turbine fuel, natural gas and alcoholic liquor for human consumption are not covered under the goods and services tax.

2.       To give effect to the amended article 269 of the Constitution, clause (d) of section 2 of the Central Sales Tax Act, 1956 has been amended. Prior to amendment, the said clause (d) had run as follows:

"(d) "goods" includes all materials, articles, commodities and all other kinds of movable property, but does not include (newspapers) actionable claims, stocks, shares and securities."

Following amendment has been made in clause (d) of section 2 of the Central Sales Tax Act, 1956."for clause (d), the following clause shall be substituted, namely:—

‘(d) “goods” means—

(i) petroleum crude;

(ii) high speed diesel;

(iii) motor spirit (commonly known as petrol);

(iv) natural gas;

(v) aviation turbine fuel; and

(vi) alcoholic liquor for human consumption;’."

As a result of this amendment, in the Central Sales Tax Act, 1956, wherever word "goods" occurs, words "petroleum crude, high speed diesel, petrol, aviation turbine fuel, natural gas or alcoholic liquor for human consumption" are to be read and understood.Prior to amendment, a registered dealer had been entitled for purchasing any goods which were required by him "for use in manufacture or processing of goods for sale by him". So if we replace the word "goods" by the words "petroleum crude, high speed diesel, petrol, aviation turbine fuel, natural gas and alcoholic liquor for human consumption", the said clause stands as under:

"for use in manufacture or processing of petroleum crude, high speed diesel, petrol, aviation turbine fuel, natural gas or alcoholic liquor for human consumption"

Therefore, any of the aforesaid goods may be purchased against Form C either for resale or for use in manufacture or processing of petroleum crude, high speed diesel, petrol, aviation turbine fuel, natural gas or alcoholic liquor for human consumption for sale by him.

Other forms prescribed under the Central Sales Tax Act, 1956 viz. Form E-1, Form E-2, Form F, Form H, Form I or Form J can also be used in relation to petroleum crude, high speed diesel, petrol, aviation turbine fuel, natural gas and alcoholic liquor for human consumption. They cannot be used for any goods covered under GST. Similar is the situation about Form D, Form E or Form F prescribed by the Commissioner, Commercial Tax Uttar Pradesh.Concession, for goods covered under GST, cannot be availed for purchase of Diesel Oil and Natural Gas.

Under U.P. VAT, Diesel oil was available at concessional rate to dealers-

(i)               who were registered under VAT; and

(ii)     who required Diesel Oil for use as fuel in manufacture of taxable goods (which have been taxable under VAT) other than non VAT goods.

In the VAT Schedule-IV, concessional rate of tax on sale of Diesel Oil, Natural Gas. Furnace Oil,etc. was fixed as under:

"Diesel oil as defined in the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act 1939 when sold to an industrial unit of a registered dealer for use in the process of manufacture of taxable goods other than non vat goods against certificate prescribed by the Commissioner".   @ 5%

                    In the U.P. VAT Act, "taxable goods" was defined as under:

"taxable goods" means any goods except goods mentioned or described in column 2 of Schedule I;

After commencement of GST, all these goods are covered under GST. Therefore, provision, prescribing concessional rate of tax, has become inapplicable to any goods.

After commencement of GST, only petroleum crude, high speed diesel, petrol, aviation turbine fuel, natural gas and alcoholic liquor for human consumption have remained under VAT. These goods have also fallen under non-VAT goods. In view of this benefit of aforesaid forms is not available to taxable persons under GST.

As it regards to supply of Natural Gas to industries located in Taj Trapezium, notification for granting concession has run as follows:

"Natural gas other than Compressed Natural Gas {CNG} when sold to registered dealer for use in the process of manufacture by an industrial unit situated in Taj Trapezium Area against certificate prescribed by the Commissioner."

Therefore, concession will be available to those persons who will be registered dealer under the U.P. VAT Act, 2008.

 

 

FROM:

ATULYA SHARMA                              

ADVOCATE                                            

 

 

 

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