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Cst doubt

Tony John (Chartered Accountant) (6085 Points)

21 March 2013

Can anyone please explain more on CST, CST rates, Form C and related matters......

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10 Replies

CA D.C. Bansal (Accounts Head) (283 Points)
Replied 21 March 2013

CST is applicable on sales from one state to another state. Present rate of CST is 2% if sold against C Form otherwise CST equivalant to effective VAT rate will be levied.

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Sonu Kumar (Account Manager) (665 Points)
Replied 21 March 2013

if you are purchasing goods from outside of state then CST registration us Required.

CST Rates are Local Vat Rate but if Purchaser Ready to Give Form C then Only 2 % CST Will Charged by Seller.

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Tony John (Chartered Accountant) (6085 Points)
Replied 21 March 2013

Sir what does "sold against C form mean" ??

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CA D.C. Bansal (Accounts Head) (283 Points)
Replied 22 March 2013

'Sold against C Form' means the purchaser is issued C Form towards the goods sold by you..

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ramesh kandala (sr.accounts officer) (122 Points)
Replied 22 March 2013

Mr.Tony Jahn

CST means Central Sales Tax levied by Central Government. If any purchase of materials/goods taken place between two states, it is called as inter -state sales. The flow of the material is from one state to another state, in such cases instead of charging Vat, CST will be levied on such sale. Central government under CST Rules gives exemption rate of CST @ 2% on submission of C form. suppose CST applicable rate on such product is 12.5% or 5%,if the buyer of the product is ready to submit a C form, then rate will be charged at only 2%. Form C means declaration of interstate sale and claim to get exempted rate of CST. If Form C was not submitted by buyer, then he has to pay the actual rate of CST on the said material

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Sonu Kumar (Account Manager) (665 Points)
Replied 22 March 2013

C Form is Tax Availing Certificate which is Issued by Purchaser to Seller of Another State...........

Against C Form only 2 % CST is Charged

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Nazia (Asst Manager - Finance) (139 Points)
Replied 26 March 2013

who has to issue C-form? For example, Goods are purchased from Bangalore, I am in chennai , my project site is in punjab. Invoice is raised on my company, chennai. But goods are delivered directly to my project site in punjab. We dont have registration in punjab. Can we issue C-form from Chennai based on cst registration in chennai.

Pls reply

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ramesh kandala (sr.accounts officer) (122 Points)
Replied 26 March 2013

Movement from one state to another:In above case when goods are given to carrier or transporter for transportation .the movement of goods starts at the time of delivery to carrier and terminated at the time when delivery is taken back from such transporter /carrier.

As per point two above CST is applicable if sale is done while goods movement from one state to another state.Its called E-1 transaction or sale in transit.

suppose: X situated in Delhi purchased goods from Y in Punjab .Y booked the material on transport and send GR/RR(goods receipt note issued by transporter) to X. X instead of receiving material from transport himself sold the material to Z in Delhi (same state) by endorsing RR/GR in the name of Z. Z takes the delivery from the transporter .

In this case sale from Y to X is covered under CST and X to Z is also covered Under CST as sale in transit.

To complete the transaction X will issue C form to Y ,

Y will issue E-1 form to X

Z will issue C form to X

In the above case even X & Z both are situated in Delhi but the sale transaction is covered under "sale in transit" clause of CST act so CST will be applicable and vat is not be charged.

CST is applicable only if goods movement is from one state to other state .If goods movement is started from one state and ends in same state then CST will not be applicable.

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