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Refund of CST for inter state purchases & intra state sales

Nikhil Thadani (Business Analyst) (25 Points)

31 December 2011

Dear Colleagues

I have a query on CST. My father has a business where he purchases goods from outside Maharashtra by paying CST @ 2%. He then sells these goods in the state of Maharashtra and duly pays MVAT on the goods.

Now since there is no setoff of CST paid against VAT payable, the entire amount of CST is lost (which is a considerable amount). Can he claim a refund of the CST paid? If so, what is the procedure for claiming refund? Can the claim be made online of a physical form needs to be filed?

Also, C-form has been taken only for a few of the inter state purchases. Would that have any bearing on the refund.

Thanks in anticipation.

Regards

Nikhil Thadani

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14 Replies

CA SANDESH MAHIPAL (Practicing in GST and MSME ) (1985 Points)
Replied 31 December 2011

I Think

Refund of CST can not be claimed or even can not be set off with payment of VAT.

Hari Wadhwa (CA in Practice) (485 Points)
Replied 31 December 2011

I confirm the advice given by Sunny.

CST paid (payable to central Govt) becomes the part of the cost of the purchase of Input or Capital Goods, as the case may be & is not allowed to be set off against the source of revenue of the state govt (i.e, local VAT law).

However, Vice-versa is permitted in most of the state laws.

Further, there is no question of claiming refund of the CST from the central govt. on the contention of input VAT paid to state govt.

Harshal Fifadra (Chartered Accountant) (1489 Points)
Replied 02 January 2012

There is no question of CST being refunded . However one can reduce the amount of CST payable against VAT, provided there is a refund of VAT i.e ITC > VAT on sales .....

working should be as follows : VAT on sales : 60 , CST ON SALES : 20

LESS : ITC : 80 LESS VAT ADJ : 20

REFUND : 20 Final liability : NIL

LESS : CST ADJ : 20

FINAL LIABILITY : NIL

nikhil shah (shahbhai) (63 Points)
Replied 02 January 2012

VAt credit can be adjusted against cst payable so there is no liability to pay cst . but you can not claim any refund for cst. ( excess of cst purchase then cst sale)

Hari Wadhwa (CA in Practice) (485 Points)
Replied 03 January 2012

Conclusion to my previous post: -

1) Excess of CST paid on Inter State Purchases = NOT ALLOWED to use to pay Local VAT liability

(thus, no question of refund)

2) Excess of Input VAT paid on Local Purchases = ALLOWED to use to pay CST payable/liability

priya (accountant) (28 Points)
Replied 20 March 2012

dear all

we are purchase goods from outside state and also sale the goods in out side the state.in this case we can claim cst input credit against cst output

Vishal Aggarwal (Working at Lalit Purushottam Dass & Co.) (38 Points)
Replied 22 March 2012

I am not completely agree with Mr. sunny aggarwal because refund of CST cannot be claimed this is true but we nca adjust cst payble with payment of VAT.

Anoop (Service) (345 Points)
Replied 23 March 2012

Priya, you can't take input credit of cst.

CA VIJAYAKUMAR S (a) (107 Points)
Replied 23 March 2012

Friends.

CST paid on purchase is nothing but the value of goods itself. It has to be included in the purchase amount itself. Also, No Refund is allowed. And Also, No Set off against VAT Payable / CST Payable is possible.

It will reduce the profit and finally the income tax. Hope this benefit will be enough for you. Pls do reply.

Regards

Rakesh (Accountant) (41 Points)
Replied 25 June 2014

Dear Vijay,

In case of profit, the Local input Vat should be capitalised according to your statement.

Can we make it sure, that exactly what is the rule behind, availing or not availing the benefit of Input CST against output CST.

Your all, reply will be appreciable.

Ritesh Tiwari (Student CS) (21 Points)
Replied 30 June 2014

Mr. Hari is absolutely Correct.

Nizammuddin (Audit Trainee) (21 Points)
Replied 14 October 2016

CST cannot be refunded or reimbursed under general VAT/ Sales tax regime. As mentioned above by many counterparts, VAT credit if any can be adjusted against CST liability.

It is worth to note that, units registered as EOU/STPI/EHTP be entitled to full reimbursement of Central Sales Tax (CST) paid by them on purchases, as provided under FTP ( amended time to time) on making reimbursement application in a prescribed form.

1 (1) (22 Points)
Replied 23 November 2018

Dear Sir,

We are paid twice CST in FY March-2016 of Rs.112650/-. but not adjusted it till date. so, how much claim for refund or adjusted in GST?

VARUN MAHAJAN ADVOCATE (Proprietor) (339 Points)
Replied 23 November 2018

I compleatly agree with all the experts whereas I would like to add something i.e. CST forms are the concessional forms i.e. getting LESS TAX FROM THE STATE FROM WHICH YOU HAVE IMPORTED GOODS. whereas if you sale the goods precured interstate than you will have to charge the Tax Rate as per applicable as per the Law of the land.

now if you are again selling the goods outside the state than by precuring the C Forms from other person could have reduced your tax liabilities if not than you have to pay the whole Tax as per Vat Act.

Finally you cant get the benifit of input tax of CST.