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Section
8(4) of Central Sales Tax Act, 1957 read with Rule 12(1)
of the
Central Sales Tax Rules [R & T], 1957 provides for
issue of C Forms for
availing the concessional rate of tax as contemplated in
section 8(1) of the
said Act.
Now
a doubt has been raised from some quarters as to the
entitlement to C
Forms for the purpose of interstate purchase of goods to
be used for the
execution/in connection with the execution of works
contract.
Evidently
C Forms can be issued by registered dealers for the
interstate
purchase of goods for
-
resale,
-
use
in the manufacture/processing of goods for sale,
-
use
in mining,
-
use
in generation/distribution of power, packing of
goods for sale/resale.
It
is a well settled position that transfer of goods
involved in the execution
of works contract is treated as 'deemed sale' which
brings with it
all privileges of a 'sale' transaction. So interstate
purchase of goods for use
in the execution of works contract is entitled to be
covered under C Forms.
Obviously
most of goods involved in the execution of works
contracts are
transferred 'not in the form of goods, but in some other
form'. So the original
goods should undergo some processing, if not
manufacturing, before
it being transferred. Factual position being so,
materials directly used
for such processing are also entitled to be purchased
under cover of C
Forms.
But
purchases which are not directly connected with the
processing of the
goods in question involved in the execution of the works
contract shall
not be entitled for purchase under cover of C Forms.
All
officers shall note the above statutory position and
take action accordingly.
Commissioner
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