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A small doubt

Sambit Patel (Director) (180 Points)

27 July 2014

Im new to trading of products and I asked for a quote from a seller outside my state for 1000 quantity of polythene bags and he sent me his quote including this two lines,

Taxes: - Including 5% CST without C form

Excise: - Including 12.36% Excise.

So, what exactly does that mean ?
Is Excise means VAT ?
So, we pay CST+VAT everytime ?
What is C form ?
What do you mean by 5% CST Without C Form ?
What happens if with C Form ?

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7 Replies

Dev (Article Trainee.) (608 Points)
Replied 27 July 2014

If cst below 2% then seller have to furnish C form obtained from purchaser to sales tax authority. In this case cst @ 5%, rate applicable in seller's state, hence c form is not applicable. And excise is charged on manufacturing and leviable at the time of clearance. Basic rate is 12% + cess. i.e. 12.36%.

Indiataxfin (service) (62 Points)
Replied 27 July 2014

Excise and VAT are differnt taxes. Excise duty is levied on manufacture of goods.

While VAT is levied if sale of goods is within the state and CST is levied if sale of gods is outside the State. VAT and CST both are not levied in any transaction.

Subscribe blog for regular update on taxes

https://www.indiataxfin.com/

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Sambit Patel (Director) (180 Points)
Replied 27 July 2014

Originally posted by : Indiataxfin
	Excise and VAT are differnt taxes. Excise duty is levied on manufacture of goods. While VAT is levied if sale of goods is within the state and CST is levied if sale of gods is outside the State. VAT and CST both are not levied in any transaction. Subscribe blog for regular update on taxes https://www.indiataxfin.com/

Great! So only the CST. What is the CST value ? Is it same for all states or is it different ? And what is C Form ?

JAYANTA (Accountant) (97 Points)
Replied 29 July 2014

CST 5% without C form means --- You are purchaser , then if you give C form to your supplier then he will charge 2% or 1.5% but if you not giving the form then he will charge 5% ( it will same % as local sales )

And Excise duty he will charge 12.36% - no chance to escape. If you have Excise Registration then you can pass on the duty after selling the material to manufacturer.

Sambit Patel (Director) (180 Points)
Replied 29 July 2014

Originally posted by : JAYANTA
	CST 5% without C form means --- You are purchaser , then if you give C form to your supplier then he will charge 2% or 1.5% but if you not giving the form then he will charge 5% ( it will same % as local sales ) And Excise duty he will charge 12.36% - no chance to escape. If you have Excise Registration then you can pass on the duty after selling the material to manufacturer.

I guess, you mis understood.

We are the eCommerce store and we are based in orissa, Now, we sell to customers only outside orissa, so we only charge CST 5% on the invoice to them. Thats the correct method, I guess.

kumar hattanna (Officer - Excise) (525 Points)
Replied 30 July 2014

Dear Sambit Patel Sir,

VAT releated to With in state territory. so first you need to know about your state (orrissa) state vat rate.

CST releatd to inter state sale. from one state to another state, here "C Form" question will arises, while you are selling to another state.

if you buy the product by paying 5% CST to other state, when you are selling to the other state it differs.

Please follow Orrissa State vat.

Regards

Kumar

Sambit Patel (Director) (180 Points)
Replied 30 July 2014

I guess, we dont need to check VAT thing, as 100% of our orders are outside Orissa only.

So, only we need to charge 5% CST and thats all. Correct ? And we cant ask C Form from our customers, as no one has that time to do and also no eCommerce stores in India does the C Form thing. Its simply charging CST and deliverying item to customer.