Central Sales Tax | SEZ transactions

Form I under the Central Sales Tax Act: Sales to Special Economic Zone Units

Form I is a prescribed declaration associated with qualifying inter-State sales to a Special Economic Zone (SEZ) unit or developer under the Central Sales Tax Act, 1956. Its use must be assessed alongside the post-GST limits on CST and the specific conditions for SEZ supplies.

Current-law distinction: Most goods fall under GST rather than CST. Form I is not the general document for claiming zero-rated GST treatment on supplies to SEZ units or developers. For GST supplies, consult the Integrated Goods and Services Tax Act, 2017, and current GST procedures.

What is Form I?

Form I is a declaration furnished by an eligible purchasing SEZ unit or developer to the selling dealer in support of the exemption contemplated by Section 8(6) of the Central Sales Tax Act, subject to the requirements of Section 8(7), Section 8(8) and the applicable rules. The declaration is prescribed under Rule 12(11) of the Central Sales Tax (Registration and Turnover) Rules, 1957.

Who issues Form I and who receives it?

Party	Role
Issuing party	The purchasing SEZ unit or SEZ developer, as applicable, subject to eligibility and the prescribed procedure.
Receiving party	The selling dealer making the qualifying inter-State sale.
Purpose	Supporting the CST exemption claim for eligible goods and transactions, where the CST regime still applies.

Legal provisions explained

Section 8(6): Exemption for specified inter-State sales

Section 8(6) provides an exemption from CST for eligible inter-State sales of goods to an SEZ developer or unit, subject to the statutory conditions. It should not be read as a blanket exemption for every sale to an SEZ.

Section 8(7): Qualifying purpose of the goods

Section 8(7) addresses the purpose for which goods are purchased, including use in the authorised operations and other qualifying purposes specified in the provision. The purchaser and seller should verify that the goods and their intended use meet the applicable statutory requirements.

Section 8(8): Declaration requirement

Section 8(8) links the exemption to the furnishing of a declaration in the prescribed form, duly filled and signed by the authorised person. The selling dealer must retain and submit the declaration in accordance with the applicable rules and procedures.

Rule 12(11): Prescribed Form I

Rule 12(11) of the Central Sales Tax (Registration and Turnover) Rules, 1957, prescribes Form I for the declaration associated with Section 8(8). State-level issuance, electronic forms, filing processes and documentary requirements may vary.

How Form I is used in practice

Check CST applicability: Determine whether the transaction concerns goods that remain subject to CST, rather than a supply governed by GST.
Confirm SEZ eligibility: Verify the purchaser's status as an SEZ unit or developer and the relevant authorised operations or other qualifying purpose.
Document the sale: Keep the invoice, transport records, purchaser particulars and evidence of inter-State movement.
Obtain the declaration: The eligible purchaser provides Form I in the manner prescribed by the relevant tax authority.
Maintain records: The seller preserves the declaration and supporting documents for assessment, audit and any applicable filing requirement.

Form I and GST: Important difference

Following the introduction of GST on 1 July 2017, CST principally continues for the goods retained outside GST under the relevant constitutional and statutory framework, including specified petroleum products and alcoholic liquor for human consumption. The exact tax treatment depends on the goods and transaction.

Under Section 16 of the Integrated Goods and Services Tax Act, 2017, qualifying supplies of goods or services to an SEZ unit or developer for authorised operations are treated as zero-rated supplies, subject to the conditions and procedures of GST law. Such GST treatment is distinct from the historical CST Form I declaration mechanism. Do not substitute Form I for GST documentation.

Common questions

Is Form I issued by the seller?

No. The eligible SEZ purchaser furnishes the prescribed declaration to the selling dealer.

Does every sale to an SEZ require Form I?

No. Its relevance depends on whether CST applies to the goods and whether the transaction meets the specific exemption conditions. GST supplies follow their own requirements.

Is Form I the same as Form C?

No. Form C generally concerns specified concessional-rate inter-State sales under Section 8(4); Form I relates to the SEZ exemption mechanism under Section 8(6) to Section 8(8).

Official legal references

India Code - consult the current text of the Central Sales Tax Act, 1956, including Section 8, and the Integrated Goods and Services Tax Act, 2017, including Section 16.
Central Board of Indirect Taxes and Customs (CBIC) - GST legislation, notifications and guidance.
GST Portal - GST compliance and filing information.
SEZ India - SEZ legislation, policy and administrative information.

This article is general information. Verify the current statutory text, amendments and jurisdiction-specific procedures before relying on a declaration or exemption.