F form on job work Done for material send to job worker premises, VAT + CST

[AJAY SINGH]

Dear sir,

please confirm me on what value we should issue F form ( as a party from Maharashtra) for the value addition made by the job worker on material send to him for the Job Work, suppose 1 lakh value material send to the job worker to his premises from maharashtra to gujrat , on which gujrat company ( job worker ) has issued f form for the value of material received by him after job work he raise the bill of 45000 for job work charges and send the goods again to maharashtra ( i.e. principal company ) , now after job work material costing reached to 145000/- which is received in Maharashtra my question is whether a party in maharashtra should issue F form for value of materail received by him

a) at ₹ 145000/- ( 100000 original Material cost+ 45000 Labour Cost)

or

b) at ₹ 100000 [ 100000 Origional Material cost+ zero (Labour charges since seperate Bills is raised by the job worker for job work so not required to be added in f form)]

Posts / Replies

[CS SANJAY MALHOTRA]

As per Section 6(A)(1) of CST Act 1956, "F" form is meant for stock transfer within own units / warehouse/ C&F agent.

Wherever Job work is undertaken which does not involve any transfer of property in goods, the job worker need not to get himself registered under Job Work, hence what the job work could do of F Form needs to be revisited.

[MUKUND THAKKAR]

Section 6A will have no applicability as regards the transactions where the goods are sent on a principal to principal basis. It is possible that in view of the judgment of the Uttar Pradesh High Court, dealers situated in other States may require a declaration in Form F from Maharashtra dealers if any goods are sent from these States to Maharashtra for job work etc. Similarly, if a Maharashtra based dealer sends any goods to another State for job work, then the job worker in that State may require the Maharashtra dealer to issue a declaration in Form F while returning the goods to Maharashtra. It is, therefore, decided that in such cases, declaration in Form F will be issued as per normal procedure to dealers in Maharashtra.

so you have to issue f form with adding labour charges. only RM portion you may consider for issuing f form.

[MUKUND THAKKAR]

please read as

so you have to issue f form with out adding labour charges. only RM portion you may consider for issuing f form.

 

[CS SANJAY MALHOTRA]

Sh. Mukund ji,

I have difference of opinion in this case. Dealers in UP may be following High Court judgement but the same is not relevant in context to other states as is not in conformity with the law.

Basic principle behind issue of F form is that the goods are cleared other than by way of sale i.e. from principal to Principal at his other place of business or to his agent. In job work material sent by manufacturer for repair ultimately comes back to manufacturer, which means conditions as stated in Rule 6A of CST are not satisfied.

Have practically experienced that F form is not provided in case of Job work as is meant for other transactions or else Industries across other states would have been following this principle.

 

 

[AJAY SINGH]

if i relied the reply given by Mr. thakkar Ji

please read as

so you have to issue f form with out adding labour charges. only RM portion you may consider for issuing f form.

is there is any decided case laws apart from UP Govt

[Ganeshan Kalyani]

Sir, the Central Sales Tax Act, does not speaks about the amount for which the Form F should be issued / received from Stock transfer between two units of the same company. It states that the movement of goods between two units of same company in a different state should be supported by statutory Form F.

Further, It is possible that with an increase in the demand in the market for a product a manufacturer may not be able to manufacture sufficent to cater the demand, he may appoint a Job worker who would process his goods and return it after finishing the process. In such cases, the manufacturer generally includes the Job worker's premises in his registration certificate as an additional place of business. This benefits the manufacturer to do stock transfer the goods between both of them.

Now, in respect of whether the Labour charges should be included in the value of Form F or not, my view is that as per accounting policy the charges incidental to receipt of goods or while buying the goods shall form part of purchase value/ stock transfer value. Thus the Labour charges shall form have to be included while issuing the Form. This is my view. Thanks.

[YAGAY AND SUN]

2009 (3) TMI 550 - SUPREME COURT OF INDIA Ambica Steels Ltd. Versus State of UP. and others

[Ganeshan Kalyani]

Sie, invoice raised by your job worker would be accounted in his books as stock transfer outward and the invoice on receipt of goods you would have accounted in your books with the same value. If you apply for the form the department will issue it and the same will tie with the amount shown in both of your books of account. The concern is value of goods should be same in both the books.Thanks