7. Use, custody, maintenance, etc. of records of certificates in Forms `E-I' and `E-II'.-

(1)A registered dealer who claims exemption from tax in respect of any subsequent sale referred to in sub-section (2) of section 6 of the Act shall obtain from the registered dealer from whom he purchased the goods, a certificate in Form `E-I' or Form `E-II', referred to in sub-rule (2) of rule12 of the Central Rules, for use in the manner specified in sub-rule (2):

¹[PROVIDED that no single certificate shall cover more than one transaction of sale except in cases where the total amount covered by one certificate does not exceed five thousand rupees.]

(2) Form `E-I' shall be used in respect of sales for which the exemption is claimed where such sale follows immediately the first sale and Form `E-II' shall be used in respect of all subsequent sales.

(3) For the purposes of sub-rule (1), a registered dealer shall obtain from the Commissioner, Form `E-I' or Form `E-II', as the case may be, to the extent required by him and shall maintain in a register in Form `3', a true and complete account of every such certificate received from the Commissioner.

(4)(a) Before furnishing the certificate referred to in sub-rule (1) to the registered purchasing dealer, the registered selling dealer or any person authorised by him in this behalf shall fill in all the required particulars in the certificate, affix his usual signature in the space provided in the certificate for this purpose, retain the counterfoil of the certificate and make over the other two portions in the certificate marked "original" and "duplicate" to the registered purchasing dealer.

(b) The counterfoil of such certificate shall be maintained by the registered selling dealer for a period of five years or such further period as may be specified by the Commissioner.

²[(5) (a) A registered dealer who claims that his subsequent sale to another registered dealer is exempt from tax under sub-section (2) of section 6 of the Act shall in respect of such claim, furnish to the Commissioner within a period of three months after the end of the quarter to which the declaration relates along with the reconciliation return prescribed in rule 4, the portion marked “original” of the certificate in Form ‘E-I’ and ‘E-II’, as the case may be, received by him from the registered dealer from whom he made the purchase along with the declaration in Form ‘C’, if any, received by him from the registered dealer to whom he made the subsequent sale. He shall also produce for inspection the portion of the aforesaid declaration and certificate marked “duplicate”, if required to do so by the Commissioner.

PROVIDED that a dealer who claims to have made a sale to a registered dealer during the period from 1st April, 2005 to 30th September, 2005, shall furnish to the Commissioner by 31st December, 2006 along with the reconciliation return prescribed in rule 4, the portion marked “Original” of the Certificate in Form ‘E-I’ or ‘E-II’, as the case may be, received by him from the purchasing dealer and shall also produce for inspection, the portion of the Certificate marked “Duplicate”, if required to do so by the Commissioner.] 

(b) The Commissioner may, in his discretion, require the registered selling dealer to produce for inspection the portion marked "duplicate" of the certificate in Form E-I or E-II.

(6) No registered dealer shall give nor shall a registered dealer accept any certificate in Form `E-I' or `E-II' except in a form obtained on application from the Commissioner and not declared obsolete and invalid by the Commissioner.

(7) The provisions of sub-rules (7) to (14) of rule 5 in relation to Declaration Form `C' referred to therein shall also apply to certificates in Form `E-I' and `E-II', with such changes as circumstances may require.

 ³[(8) Every registered dealer to whom any declaration form is issued by the Commissioner shall furnish to the Commissioner utilization account in Form ‘2B’ within a period of three months after the end of the quarter to which the declaration relates. In case no declaration form is utilized during any quarter, in that event also the dealer shall furnish to the Commissioner utilization account in form ‘2B’ stating nil utilisation:

PROVIDED that the utilization account in Form ‘2B’ of the forms relating to the transactions prior to 1st October, 2005 shall be furnished to the Commissioner within a period of three months after the end of the quarter in which such declaration forms are issued to him by the Commissioner.] 

Note :-

1.  Omitted vide notification No.F.3(3)/Fin(Rev-I)/2012-13/DSIII/452, dated 15.06.2012 w.e.f. 15.06.2012.

2.  Substituted vide notification no.F.3(2)/Fin(T&E)/2007-08/(iii)/dsfte/354, dated 14.05.2007, w.e.f. 14.05.2007. Earlier read as:-

(a) A registered dealer who claims that his subsequent sale to another registered dealer or to the Government is exempt from tax under sub-section (2) of section 6 of the Act shall in respect of such claim, furnish to the Commissioner within a period of nine months from the end of the year alongwith the statement prescribed in rule 4, the portion marked "original" of the certificate in Form `E-I' and `E-II', as the case may be, received by him from the registered dealer from whom he made the purchase along with the declaration in Form `C', if any, received by him from the registered dealer to whom he made the subsequent sale. If such sale is to the Government, he shall furnish to the Commissioner, a certificate in Form `D'. He shall also produce for inspection the portion of the aforesaid Declaration and certificate marked "duplicate", if required to do so by the Commissioner.

PROVIDED that a dealer who claims to have made a sale to a registered dealer during the period from 1st April, 2005 to 30th September, 2005, shall furnish to the Commissioner by 31st December, 2006 along with the reconciliation return prescribed in rule 4, the portion marked “original” of the Certificate in Form ‘E-I’ or ‘E-II’, as the case may be, received by him from the purchasing dealer and shall also produce for inspection, the portion of the Certificate marked “duplicate”, if required to do so by the Commissioner. Sub-rule (5) (a) of Rule 7 was also substituted vide No.F.3(77)/Fin.(T&E)/2005-06/1528 kha, dated 17.03.2006, w.e.f. 17.03.2006

3.   Inserted vide No.F.3(77)/Fin.(T&E)/2005-06/1528 kha, dated 17.03.2006 w.e.f. 17.03.2006.