Benifit of cst billing?

Others 5564 views 3 replies

Ankit Goenka

IT Dealer

79 Points Joined February 2011

I have been purchasing materials @ 2% CST Bills - ie buying goods at 2%CST - and providing supplier with C FORMS.
of late a supplier offered to send me material at 5% CST Billing with no obligation of sending the C FORM to him!

Would the materials purchased at 5% CST be legitimate billing (pakka) ? or would it be illegal (katcha) ??

also if i buy a material at Rs.102/- *which included 2%cst and I add my transportation to it - say Rs.1/- and my margine - say Rs.1/- and then 5% VAT (as applicable in my state on the material i sell) am i doing anything incorrect?

Kindly help....

Also what would be the differance in buying material at 5% CST and 5% VAT - from other state ! As i have understood till now - both are illegally billed (katcha) material....please correct me if i am wrong

Replies (3)

ashish gupta

student

1922 Points Joined May 2008

CST billing of 5 % VAT is proper and legal. Nothing wrong in this. But you cannot take input credit of that 5%. So its advisable to purchase material at 2% against C form.

You are charging the VAt in correct way for your bills in your state.

2 % CST is only charged when u provide C form to the dealer. If you dont provide C form then he will charge the applicable VAT rate in that state i.e. 5 % in your case. You cannot take input credit of either CST or VAT in case you purchase material from other state. Billing is proper (pakka) in both cases.

CA.Kanhaiyalal Gupta

Taxation Incharge

290 Points Joined October 2011

Yes agree with Ashish

Ankit Goenka

IT Dealer

79 Points Joined February 2011

if billing is done at 5% cst - do i still need to provide road permit? if not , would ceasing the 5% material by sales tax authorities be legal? please clearify