Form `C' non-submission, VAT + CST

[SANJAY MUKHERJEE]

Seller finds it difficult to collect c-form's within the time frame or before the Sales Tax Assessment complete. There are cases, even after completion of Sales Tax Assessment, the Buyer either not submitted the c-form or have not responded on making the remittance against balance differential taxable liability.

The problems being faced are:

1. Buyer apply for the Form C’s, after a follow up from the organization.

2. Buyer cannot be contacted due to the buyers being very old or contact details not available.

3. The Seller by error has done Form C sale to non registered dealers / buyers.

4. Buyer claiming no business with the Seller.

5. Buyer claiming sales tax Forms issued but not received by the Seller / lost in transit.

6. Buyer claiming service / product issues – due to which they will not release the Form C’s.

7. Buyer having no intention to issue Form C’s.

8. Further information required (PO, road permit etc) to issue the Form C’s.

9. In large organizations, the responsibility to issue the Form C is not defined, therefore the follow up cannot be conducted with the right person in the organization.

10. Buyer insist that C-form will be exchanged against E-1 form, whereas E-1 form is only issued after duly receipt of the original c-form.

Taking into consideration the above points, could you kindly suggest if there is a way out such as "CIBIL", wherein a banker after verifying the CIBIL Report the loan is passed to the requestee.

Regards

Sanjay Mukherjee

Posts / Replies

[Ganeshan Kalyani]

The issues can be resolved only by your internal system. Form C should be issued/received quarterly. Therefore after a quarter is over follow up should be initiated from your side. Speak with customer for Form C at the time of initial dealing. If you doubt about receipt of Form C you can charge full rate of CST tax. Sales team should be given responsibility of collected forms since they are regularly in touch with customers. Maintaining tracking list and reviewing it at regular interval and timely action on pending forms. These are some of the steps which can be adopted and you may evaluate such internal control system. This is my view.

[SANJAY MUKHERJEE]

Sir,

Thanks for your response. However, we would like to inform that what you have mentioned exactly the same practice is adopted for years, but response from client's are very poor, resulting accumulation of huge taxable liability outstanding. Some of our customer's are holding C-form with a view to exchange with original c-form. On account of poor response/commitment, we are unable to recover the c-form's within 90 days end of previous quarter, principally.

Kindly suggest.

Regards

Sanjay Mukherjee

[Ganeshan Kalyani]

You have to device internal control and system as such that these problems are curtailed. I have heard some companies does take a post dated cheque and in warns the counter party that if the forms are not received then that cheque will be encashed. I am sure how far these practice are right. but i have shared what I have heard. Thanks.

[Ganeshan Kalyani]

Hope your query is resolved.