Consignment against F-form under CST Act

Mayur Modi Director	We are Consigment Agent on the name of Modi Agrigenetics Pvt  Ltd Parbhani Dist Parbhani Maharashtra for Deccan Cements Ltd Hyderabad. We had given Advance payment to Deccan and purchased cement against F-Form.,now Sales Tax officer is not issuing us F-FORM reasoning F-FORM cannot be issued if payment is advance,We have paid complete maharashtra vat 12.5% on our consignment. Pls guide.

Posted 4 days ago

V.Devananda Narasimham  Advocate

Consignment agent is a dealer acting for and on behalf of his principle as per consignment agreement executed  among them along with terms and conditions stipulated therein including commission. If a consignment is moved from a principle as a consignment transfer, title of the goods with principle.On receipt of goods the agent  should prepare sale pattile(consignment accounts) and balance sale proceeds should tranfer to them along with F form for each month after deducting his commission. The F form value should be gross sales proceeds and not the transfer value. According to Sec.6A of the CST Act, 1956 if the transfer is not for the reason of a sale it is exempted from payment of tax or otherwise it is an interstate sale.  In this case you have stated that advance payment was made against consignment. If it is in accordance with the terms of the consignment agreement, it cannot be presumed as  consideration and balance sales proceeds shall be paid subsequently. It is the normal business practice that payment will be settiled after meeting all expenses relating to consignment stock transfer along with accounts and F form. Here it is not clear that whether advance payment is in accordance with the terms and conditions of the agreement. If full value of the consignemnt is paid and the principle has no title of the property, it is not a consignment stock tansfer but  it is an interstate sale. If so the contention of the Sales Tax Officer is in accorance with CST Act.

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Introduction

In indirect state taxation, it is the liability of the registered dealer to collect and remit tax @ as provided in the tax statute. In Kerala (India), value added taxation was implemented from 01-04-2005. Under this, VAT system of taxation, a dealer is liable to pay tax on the value addition made by him if he had paid tax on his purchases within the State of Kerala i.e, tax payability=(output tax collected-input tax paid on purchases). So if you are not liable to pay tax, don't pay and never pay.