TRADE CIRCULAR No.VAT/MMB/1008/ 15/Adm-6/ B
Trade Cir.No.-2T of 2010, Date: 11/01/2010
Sub: Tax Treatment of Goods sent to other States.
This office had issued above referred Trade Circulars explaining scope of section 6A of CST Act, 1956. In the Trade Circular dated 20th February 2007, a view had been taken that section 6A of CST Act, 1956 deals only with transactions between principal and agent and that it applies in those cases where the movement of goods is to the place of business of the dealer himself in another state or to his agent or his principal in another state. It was viewed that section 6A does not deal with transactions which are on a principal to principal basis. Hence, the non-sale transactions like job work which are transactions from principal to principal basis were viewed to be out of purview of section 6A of CST Act, 1956 and not retiring F Forms.
2. Thereafter, the Allahabad High Court delivered a Judgement dated 17th August, 2007 in the case of M/s Ambica Steels Ltd. V/s the State of Uttar Pradesh. The issue before the Court was whether the petitioner is required to submit the declaration in Form F in respect of the transaction of job work performed by it. The High Court decided that it would be necessary to furnish declarations in Form F in such instances. In view of this Judgement, it was decided to issue F Forms to the dealers in Maharashtra who received goods for job work or as goods return. This aspect has been elaborated in Trade Circular 5T of 2009 dated 29th January 2009.
3. The decision of Allahabad Hicdi Court in M/s Ambica Steels Ltd was challenged before the Hon’ble Supreme Court. In the brief order passed by the Hon’ble Supreme Court (24 VST 356) in this case, it is stated that the dealer agreed to produce the retired declarations. Hon’ble Supreme Court has not done away with the need of mandatory F Forms applicable to such transactions as job work which was outcome of the Allahabad High Court decision. In view of this, the decision of the Allahabad High Court in case of M/s. Ambica Steel Ltd. (12 VST 216) stands and following instructions are issued.
4. The Trade Circular 16T of 2007 dated 20th February 2007 and Trade Circular 5T of 2009 dated 29th January 2009 are hereby withdrawn. F forms are mandatory for all transactions of inter state transfers (not by way of sale) including job work and goods return. Declarations in Form F will be issued to the dealers to comply with this view.
5. This Circular cannot be made use of for legal interpretation of the provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.
6. You are requested to bring the contents of this circular to the notice of all the members of your Association.
(Sanjay Bhatia) Commissioner of Sales Tax, Maharashtra State, Mumbai
Ref: 1. Trade Circular 16T of 2007 dated 20th February 2007. 2. Trade Circular 5T of 2009 dated 29th January 2009.