General CST question

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TimTaxMan

CPA

26 Points Joined February 2010

Hello, I am new to Indian taxes. I am understanding the state VAT fairly well, however it is the CST that I am struggling with. The CST is for interstate sales, correct? The rate appears to be 2% when selling to registered dealers, correct?

The part that I am not understanding is the correlation between the VAT and CST for sales to unregistered persons. Does the CST basically mirror the state VAT? Are the rates always the same? If a state's reduced rate changes for VAT, does it automatically change for CST? If a state has an Additional Tax for VAT, is there also an Additional Tax or CST? I have read many Notifications detailing changes in VAT rates, but they never mention the CST.

I would very much appreciate anyone who can write a few quick sentences explaining the generalities of the CST.

Thanks so much!!

Replies (2)

Guest

Central Sales Tax Primer

Basic Concepts of Central Sales Tax

Sale, Goods and Dealer

Goods involved in Works Contract

Quantum of CST Payable

Sale during import and export

Declared Goods

Forms and Procedures under CST

Appeals and Penalties

https://www.dateyvs.com/indexis.htm

Guest

VAT is for Within the Stet Sales whereas CST is for inter-state sales i.e. between two states.

Now the following exzmple will help you.

A(Dealer in Maharashtra) sells goods to B(Dealer in Gujarat) a product say Readymade Garment which is taxable @ 4% (if within the state) this product will be charged @ 2% if the dealer in Gujara who is registered.

Similarly the product will be charged @ 4% if the dealer in Gujarat is not registered in Gujarat.