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Should cst and vat rate on any item be same or not?

Muneesh (assistant manager finance) (34 Points)

20 September 2016

Sir,

I want to know if Local tax on any item if 13.75% then CST rate full tax should be same or different. why please clear.

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 20 September 2016

VAT is charged by local state government, its rate differ from state to state. While CST is charged by Central government and is levied only on inter-state transactions, and is uniform through-out country.

Muneesh (assistant manager finance) (34 Points)
Replied 20 September 2016

Sir,

Thanks for reply. But let me confirm one thing in case of CST, As per you mean central government wil bear loss if any item is 13.75% vat and CST 5%.. Difference is 8.25%. I think rate should be uniform according to item and in case of C form, central government give relaxation . what do you say?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 21 September 2016

Well, now GST would be reducing all this anomalies . There the IGST will be equal to CGST+SGST.

kanniyappan (accounts executive) (29 Points)
Replied 23 September 2016

Your Locat sales tax rate 13.75%

Cst (Note:1) 2%

Cst (Note:2) 13.75%

Note:1

If the buyer able to give C-Forms that is the goods related to their trading,manufacturing,packing,capital etc..(Eligible to give C-Forms)

Note:2

other wise (If not able to give C-Forms) then the local tax rate will apply in that case 13.75%

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Sec 8. Rates of tax on sales in the course of inter-State trade or
commerce:-- (1) Every dealer, who in the course of inter-State trade or
commerce, sells to a registered dealer goods of the descripttion referred to
in sub-section(3); shall be liable to pay tax under this Act, which shall be
three per cent, of his turnover or at the rate applicable to the sale or
purchase of such goods inside the appropriate State under the Sales Tax
Law of that State, whichever is lower;

(goods of the class or classes specified in the Certificate of
Registration of the registered dealer purchasing the goods as being intended
for re-sale by him or subject to any Rules made by the Central Government in
this behalf, for use by him in the manufacture of processing of goods for sale
or 3[ in the telecommunications network or] in mining or in the generation or
distribution of electricity or any other form of power;

containers or other materials specified in the Certificate of
Registration of the registered dealer purchasing the goods, being containers
or materials intended for being used for the packing of goods for sale;

containers or other materials used for the packing of any goods or
classes of goods specified in the certificate of registration referred to in clause
(b) or for the packing of any containers or other materials specified in the
Certificate of Registration)