Vat and cst for online purchase

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Querist : Anonymous

Querist : Anonymous (Querist)

14 July 2014 Hi,

We have an online store, we are also a seller on snapdeal.com with our firm registered in AndhraPradesh(Now Telangana), I have a question for which I haven't found clear answer on internet, one of my friends suggested this platform and here I am looking for help from experts.

We do local purchases in Telangana state, hence pay the VAT. We sells watches (which incurs 14.5% vat). Now the real question is when a order is placed on our online store from a customer residing out of Telangana i.e from other state then do we need to pay CST also, or just VAT filing is enough? An answer with a example would really help me a lot.

Thanks in advance :-)

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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14 July 2014 While purchasing any goods locally you will pay VAT(14.5% VAT on watches). When you sell the same goods to local or interstate customers you have charge VAT/CST again in your bills. In interstate sale to a regostered dealer-against 'C' form it is 2%,otherwise,it is 14.5% only.VAT paid on local purchases can be deducted from the tax payable to govt on local/interstate sale andd the balance has to be paid.Suppose you buy 100 watches for Rs3,00,000- and sell them for Rs3,20,000- .VAT paid on purchases is Rs43,500- and VAT collected on local/interstate sale is Rs46,400-.You pay to govt,in returns,Rs46400-43500=Rs2900.If interstate sale is against 'C' form you will get refund of 43,500-6400=37,100-....mjk

Querist : Anonymous

Querist : Anonymous (Querist)

14 July 2014 Thank you for the reply sir.

Correct me if I am wrong please, do you mean if the interstate sale is to a dealer then only 2% CST is charged? What if the sale is to a end user i.e customer, in that cast 14.5 is charged?

Suppose for a month the local purchases are Rs 3,00,000 including vat.
The sales within the state to end customer is 75,000 and it is 2,75,000 for inter state sale to end customer. In this case what is the amount that should be paid to government as taxes?

Thanks!