Form E-II under the Central Sales Tax Act: Subsequent Interstate Sales

Form E-II is a statutory certificate used in qualifying subsequent sales of goods while they are moving from one State to another. It supports the exemption mechanism under Section 6(2) of the Central Sales Tax Act, 1956, subject to the applicable statutory conditions.

What is Form E-II?

Form E-II is the prescribed certificate under Section 6(2) of the Central Sales Tax Act, 1956, read with Rule 12(4) of the Central Sales Tax (Registration and Turnover) Rules, 1957. It is used for a subsequent sale in a chain of sales effected by transfer of documents of title to goods during interstate movement, where the prescribed form for that link is E-II.

The prescribed form identifies the dealer effecting the sale, the purchasing dealer, the places of dispatch and destination, invoice details, description, quantity and value of goods, transport document particulars and relevant Form C details.

Legal provisions explained

Section 3: Sale in the course of interstate trade

Section 3 describes when a sale is treated as an interstate sale, including a sale occasioning movement of goods between States or effected by transfer of documents of title during such movement. The latter concept is central to subsequent-sale transactions.

Section 6(2): Exemption for eligible subsequent sales

Section 6(2) provides an exemption for specified subsequent interstate sales made by transfer of documents of title during movement of goods. The exemption depends on the character of the transaction, eligible buyer and goods, and production of the prescribed certificate and declaration or other applicable supporting document. It is not an automatic exemption for every resale or every movement of goods.

Rule 12(4): Form E-I and Form E-II certificates

Rule 12(4) prescribes the E-I and E-II certificates for the relevant links in a chain of subsequent sales. Form E-II is used for the appropriate later transferor in the chain, as specified in the statutory form. The correct certificate depends on the transaction sequence; Form E-I and Form E-II are not interchangeable.

Section 8(4): Form C declaration

Where the subsequent sale is to a registered dealer and the law requires a declaration under Section 8(4)(a), Form C is generally relevant. Form C is furnished by the purchasing dealer; it is distinct from the E-II certificate issued by the selling dealer.

Who issues and receives Form E-II?

• Issuing dealer: The eligible transferor or subsequent seller who effects the relevant sale by transfer of documents of title during movement.
• Receiving dealer: The purchasing dealer in that link of the transaction, who needs the certificate for the prescribed compliance chain.
• Prescribed authority: The relevant tax authority receives the statutory copy or evidence as required under the applicable rules and procedures.

It is inaccurate to describe the recipient in every case as the first purchaser: the recipient is the purchasing dealer for the particular sale covered by the certificate.

How a subsequent interstate sale works

1. Goods begin moving from one State to another under an original interstate sale.
2. While the goods remain in movement, a dealer sells them onward by transferring the documents of title, such as an endorsed railway receipt or other qualifying transport document.
3. Further qualifying transfers can take place during that same movement.
4. The relevant transferor issues Form E-I or E-II as prescribed, and the purchaser furnishes Form C where applicable.
5. Dealers retain matching invoices, transport records, registration details and certificates to substantiate the Section 6(2) claim.

Documents and practical checks

• Invoices for the original and subsequent sales, with consistent goods descriptions, quantities and values.
• Railway receipt, lorry receipt or other document of title and evidence of its transfer during movement.
• Relevant Form E-I or E-II certificate, correctly completed and signed.
• Form C or other prescribed evidence, wherever the applicable statutory conditions require it.
• Registration particulars and transaction records sufficient to establish the interstate movement and chain of sales.

Follow the applicable State tax department's procedure for issue, submission, correction and verification of declaration forms. Deadlines and electronic facilities may vary by jurisdiction and period.

Form E-II after GST

The 2017 amendments narrowed the definition of goods in Section 2(d) of the CST Act to petroleum crude, high speed diesel, motor spirit (petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption. Therefore, the CST declaration mechanism is not the general documentation route for ordinary goods covered by GST. Historic transactions and assessments may still require the relevant CST forms.

Official legal references and Form E-II download

• India Code: Central Sales Tax Act, 1956 - statutory text, including Sections 2, 3, 6 and 8.
• Official Central Sales Tax Act PDF - consult the amendments and applicable version.
• Official Form E-II PDF - Delhi Trade and Taxes Department - certificate prescribed under Rule 12(4).
• Central Board of Indirect Taxes and Customs - GST legislation and official guidance.

Related Central Sales Tax resources

See the guide to CST forms and declarations, the CST registration procedure, and the CST rates article. Historical Delhi VAT materials remain available for pre-GST periods: DVAT forms.

This article explains the general legal framework. For a specific transaction, apply the statutory text, relevant notifications and the rules in force for the relevant tax period.