In case of, any Interstate Sales 

there is any subsequent sale during such movement effected by a transfer of documents of title to such goods to a registered dealer

then the subsequent sale shall be exempt from tax


Procedure to be followed

  1. First sale shall be Interstate (by any manner-either actual interstate by movement

         of goods outside state or by transfer of documents of title)

  1. Second sale should be to registered dealer

         by transfer of documents of title only

         during movement of goods from one state to another

  1. First seller gives E1 Form
  2. Purchaser, if interstate, gives C Form




Why is E1 Form introduced?

It is done to avoid double CST

  • If there is no E1 Form, CST is charged at each sale
  • If there is E1 Form, CST is charged only once at the time of first sale


What is E2 Form

In case, there is one more interstate sale to registered dealer, the second seller gives E2 Form


Levy of CST in case subsequent sales is taxable:

It becomes taxable if

Required forms not furnished


Subsequent sale is to unregistered dealer


Taxability as follows

Subsequent Seller is registered

It is taxable in state where it is registered


Subsequent seller is not registered

It is taxable in sale where subsequent sale is effected     


When is C Form not required

If subsequent sale is taxable at rate lower than 3% or is exempt


The dealer proves the same to prescribed authority

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.