RATES OF TAX ON SALES IN THE COURSE OF INTER-STATE TRADE OR COMMERCE [SUBSTITUTION OF CLAUSE (B) OF SECTION 8(3)] EFFECTIVE FROM THE DATE OF ASSENT OF FINANCE BILL BY THE PRESIDENT

Section 8(3)(b) of the Central Sales Tax Act, 1956 (‘CST Act’) is being substituted to cover within its ambit, the purchase of goods for resale or for use in manufacturing / processing for sale of only those goods which are presently covered under CST (vide Section 2(d)). 

Vide this amendment, the words ‘of goods for sale or in the telecommunications network or in mining or in the generation or distribution of electricity or any other form of power’ used in Section 8(3)(b) are sought to be omitted, with simultaneous addition of reference to Section 2(d) of the CST Act.

L&S Comments:

• Prior to the amendment, procurement of goods against C Form for use in processing or manufacture of goods which were outside the ambit of CST or in telecommunication network, or in mining or in the generation or distribution of electricity or any other form of power was a subject matter of dispute.

• Numerous writs were filed before various High Courts on this issue and were decided in the favor of the assessee. Resultantly, usage of C Form for above mentioned purposes were allowed by the Courts.

• Vide this amendment, C Form can be issued for the purchase of goods for resale or for use in manufacturing/processing for sale of only those goods which are covered under CST law namely, (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.

• The said amendment will be eective from the date of assent of Finance Bil by the President.