vat+cst

This query is : Resolved

vicky shaw (Querist)
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17 November 2009 hello everybody
i buy lubes locally paying vat and sell it to another state charging cst.how do i recover my input vat.
VAT rate 12.5%
CST rate 1%

the buyer has sent me form c.what is its use.

i dont supply locally.pls help me.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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17 November 2009 CST rate is 2 % from 01/06/2008 for which C form is required. So the buyer is issuing that. In the absence of C form higher rate of tax ,ie.state VAT rate, in your case 12.50 % , will apply to the interstate sale also.

Rahul Vora

Rahul Vora (Expert)
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17 November 2009 As explained by the expert, CST rate is 2% against Form C from 01/06/2008 and not 1%. So the buyer has to issue C Form which you have to submit to the sales tax dept. If C Form is not issued then you have to charge sales tax at local VAT rate.
You can adjust you input VAT against payment of CST and incase you feel that you will have a large amount of credit even after adjusting for CST payment, then you can apply for refund of input VAT

M Prabhakar Menon

M Prabhakar Menon (Expert)
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17 November 2009 Vat on certain items cannot be included in input vat this includes lube.petrol.diesel.motor cars except for tourism business purpose

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