Vat info

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 March 2012 Hello,
I have just started a snack food manufacturing unit in punjab and want to know VAT rates applicable in Punjab and outsidepunjab like Haryana, Chandigarh, himachal and jammu.
also, how will i charge VAT in invoice while selling my goods to customers in various states?
When will a C-form will be provided by customers?
How will CST be determined and how to deposit CST charged on invoice from customers for out of state customers?

Thanks

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

18 March 2012 Since you are setting up an industry then you should have a proper C.A. or a consultant . Moreover you have to get your unit registered under VAT as well as CST it is better you should consult a local person otherwise you might be misguided or better you to to the ST office and esquire.

You have also asked the question on Excise duty which has been replied and if you ask question where professional expert is required it is my advise that you should take the help of an expert.

Querist : Anonymous

Querist : Anonymous (Querist)

18 March 2012 Thanks a lot.
I have registered my firm for VAT number and received last month. I have also started billing this week and sold few itesm out of state and charged CST of 2%.
Do i need to register for CST? If yes, how?
I have local lawyer and CA but hesistant to ask these critical questions.
Also, i have subscribed to CACLUBPRO.
Where do we deposit the CST charged on bill?( Imean Sales tax office,excise e.t.c)
Regards,

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

02 August 2025 Here’s a straightforward breakdown to help you with **VAT and CST for your snack food manufacturing unit** in Punjab and selling to other states:

---

### 1. **VAT in Punjab and other states**

* **Punjab VAT rate** for snack foods can vary, but generally it’s around **5% to 13.75%** depending on the product.
* Other states like Haryana, Chandigarh, Himachal Pradesh, and Jammu may have their own VAT rates. For example:

* Haryana: Usually around **5-12.5%** for food items
* Chandigarh: Follows Punjab VAT mostly, but confirm locally
* Himachal Pradesh: Rates can be around **5-12.5%** for such goods
* Jammu & Kashmir: May differ; check local VAT rules

You should check the exact VAT rate for your product in each state’s VAT schedule, but for interstate sales, VAT doesn’t apply — instead, CST applies (explained below).

---

### 2. **Charging VAT or CST**

* **Sales inside Punjab:** Charge **Punjab VAT** on the invoice at the applicable rate.
* **Sales outside Punjab (Interstate sales):** Charge **CST (Central Sales Tax)**, usually at **2%** or **trade rate** if you have Form C from your buyer.

---

### 3. **What is Form C?**

* **Form C** is a **declaration form** provided by your interstate business customers to claim concessional CST rate of 2%.
* When you sell goods interstate to a registered dealer who provides Form C, you charge CST at 2%.
* If Form C is not provided, you must charge CST at the **full rate applicable in your state** (Punjab’s VAT rate) as CST without Form C is basically VAT at the full rate.

---

### 4. **Do you need to register for CST?**

* Yes, you **must register separately for CST** if you sell goods outside Punjab to other states.
* VAT registration covers intra-state sales but CST registration is required for interstate sales.
* Usually, you register CST with the same Sales Tax office or department where VAT registration is done, but check with Punjab VAT authorities.

---

### 5. **Where and how to deposit CST?**

* CST collected on interstate sales is deposited with the **State Sales Tax Department or Commercial Tax Department of Punjab** (your state of registration).
* You will file **CST returns separately**, usually monthly or quarterly, as per the rules.
* CST is paid to your home state (Punjab), even though sales are interstate.

---

### Summary:

| Situation | Tax to charge | Form C needed? | Deposit & Return Filing |
| -------------------------------- | ------------------------------- | -------------------------- | --------------------------------------- |
| Sale inside Punjab | Punjab VAT | Not applicable | Deposit VAT & file VAT return in Punjab |
| Sale outside Punjab (interstate) | CST (2% concessional or higher) | Yes, for concessional rate | Deposit CST & file CST return in Punjab |

---

### Suggestion:

* Always get **Form C** from your interstate business buyers to pay CST at concessional rate.
* Maintain proper records of Form C for audit.
* If unsure, consult your CA or tax professional.
* VAT & CST registrations are separate, so confirm CST registration status with local tax office.

---

If you want, I can help you draft the invoice format with VAT & CST or guide you on return filing schedules. Just ask!

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now