INTERVIEW QUESTIONS TAX SALES TAX DETAILS

Question: What is Forms E1 and E2 used for, in case of Central Sales Tax (CST)?

Answer: According to Section 6(2) of the CST Act, only the first inter-state sale is taxable and the subsequent sale during movement of goods by transfer of documents is exempt from tax, if the purchasing dealer is a registered dealer.

Usually, the transfer of a document refers to the document of title to goods which is endorsed and transferred in favor of the purchaser and is duly signed by the endorser. The document can be further transferred by subsequent endorsements.

The subsequent sellers have to obtain a declaration in C Form from the dealers who sold them the goods. The selling dealer has to make a declaration in E1 Form in case of the first sale and E2 Form in case of subsequent sales.

According to Section 6(2) of the CST Act, only the first inter-state sale is taxable and the subsequent sale during movement of goods by transfer of documents is exempt from tax, if the purchasing dealer is a registered dealer.

Usually, the transfer of a document refers to the document of title to goods which is endorsed and transferred in favor of the purchaser and is duly signed by the endorser. The document can be further transferred by subsequent endorsements.

The subsequent sellers have to obtain a declaration in C Form from the dealers who sold them the goods. The selling dealer has to make a declaration in E1 Form in case of the first sale and E2 Form in case of subsequent sales. Source: CoolInterview.com

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