So many people have a question that What is Central Sales Tax. To those Assessee’s here we are providing Central Sales Tax in India is a form of Indirect Tax Imposed on the “Sale of Goods” by Central Government of India. The CST Tax is applicable only in the case of “Inter-State Sales” made within the state or import/ export of sales. There are 2 different types of Sales Tax. They are
- Central Sales Tax: This CST Tax is the tax that is imposed by Central Government.
- Sales Tax: Each State levies this tax.
|CST Registration Procedure (CST Transaction Forms)||CST Tax Rules|
There are different categories of Sales.
- Sales Liable to sales tax within the State.
- Intra-State Sales.
- Sales Liable to Central Sales Tax.
- Inter-State Sales.
- Sales were not Liable to Sales Tax.
- Sales in the course of Import.
- Sales in the course of Export.
What is Inter-State Sale?
Inter-State sale means when sale or purchase constitutes the movement of goods from one state to another. Accordingly, consignments to agents or transfers of goods to branch or other offices is not a sale as per the CST Act 1956. Finally, inter-state sale means: Movement of goods from one state to another or
- Movement of goods from one state to another or
- Transfer of documents of title to the goods during their movement from one State to another. The above two modes are mutually exclusive.
Features of CST Tax
The Features of Central Sale Tax are:
- It extends to the whole of India.
- Every dealer who makes inter-sate sale must be registered dealer and a certificate of registration has to be displayed at all places of his business.
- There is no exemption limit of turnover for the levy of Central Sale Tax.
- Under this Act, the goods have been classified as:
- Declared Goods or Goods of particular importance in inter-state trade or commerce and
- Other Goods.
- The rates of Tax on declared goods are lowered as compared to the rate of tax on goods in the second category.
- The tax is levied under this act by Central Government, but it is collected by that State Government from where the goods were Sold. The tax thus collected is given to the same State Government which collected the tax. In the case of a union territory, the tax collected is deposited in consolidated fund of India.
- The rules regarding submission of returns, payment of tax, appeals, etc. are not given in the act. For this purpose, the rules followed by a state in respect of its own sale be followed for the purpose of this Act also.
- Even though the Central Government has framed the Central Sales Tax but, the State Governments are allowed to frame such rules, subject to such notification and alteration as it is deemed to fit.
Originally, the rate of Central Sales Tax was 1%, which was increased first to 2%, then to 3% and w.e.f (with effect from) 1st July 1975 to 4%. These CST Rates varies for different categories.
- To a registered dealer against ‘C form’ state in an inter-state sale, the CST Rate is 4% or local sales tax rate whichever is lower.
- If under the local sales tax rules the sale or purchase is exempt from Central Sales Tax the CST Tax is Nil.
- In an inter-state sale to the government against ‘D Form,’ the rate of CST is 4% or local sales tax rate whichever is lower.
- The CST Tax Rate in the case of inter-state sale of declared goods without C or D Form is Twice the rate of tax applicable to the local sale or purchase of such goods in that state.
- In the case of other goods that is the goods which are non-declared the rate of CST is 10% or the applicable local sales tax of that state, whichever is higher.
Here the table given below provided the highlights of Central Sales Tax rates for different situations.
|Local Tax Rate||Central Sales Tax Rate|
|When sale is to registered dealer|
|Goods exempt from local tax||Nil|
|>2%||2% (form C required)|
Objectives of Central Sales Tax
The principal objects of Central Sales Tax are:
- To formulate principles for determining when a sale /purchase of goods takes place:
- In the course of inter-state trade or commerce under Section 3.
- Outside the state under Section 4.
- In the course of import/ export from/outside India under Section 5.
- To provide for:
- Levy of tax under Section 9(1).
- The Collection of tax under Section 9(3).
- Distribution of tax under Section 9(5) on the sale of goods in the course of inter-state trade or commerce.
- To declare certain goods to be of special importance in the course of inter-state trade or commerce defined in Section 14.
- Taxation of Declared Goods: To specify the restrictions and conditions in the matter of imposing taxes on the sale or purchase of goods declared by the Central Government to be of particular importance in the course of inter-state trade or commerce under Section 15.
- To provide for the collection of tax from companies in the event of the liquidation mentioned under Section 15.
- Authority to settle disputes in a course of inter-state trade or commerce.
Central Sales Tax Rules, 1957
The Rules of CST Tax are framed by the Central Government. Even though these rules are framed by Central Government, the State Governments are allowed to frame such rules, subject to such notification and alteration as it is deemed to fit. These rules are different for various states.
|Rule 1||Short title.|
|Rule 3||Verification and signature in the application for registration|
|Rule 4||An application for registration.|
|Rule 5||When the notified authority.|
|Rule 6||Manner of keeping the certificate of registration.|
|Rule 7||Where a dealer desires the certificate.|
|Rule 8||Obtaining of duplicate certificate of registration.|
|Rule 9||Amendment or cancellation of the certificate of registration.|
|Rule 10||Application for cancellation of the certificate of registration.|
|Rule 11||Period of filing returns.|
|Rule 12||Declaration and certificates. The Manner of an issue, maintenance of account and other allied matters.|
|Rule 13||Prescription of goods for certain purposes.|
|Rule 14||Punishment for breach of any rule.|
CST Forms – Download
Here the Assessee can get all CST Forms like CST Registration Form, CST Challan, CST Form 1, CST Application Form, CST Form C, etc.
|S.no.||CST Forms||Brief Description|
|1.||CST Form A||CST Application for CST Registration under Section 7(1)/7(2) of Central Sales Tax Act, 1956.|
|2.||Form B||Certificate of Registration.|
|3.||Form C under CST||Form of Declaration.|
|4.||Form D||Form of Certificate for making Government Purchases.|
|5.||Form E1||Certificate under sub-section (2) of Section 6.|
|6.||Form E2||Certificate under sub-section (2) of Section 6. 62 [See Rule 12(4)].|
|7.||CST Form F||Form of declaration to be issued by the transferee.|
|8.||Form G||CST Form of Indemnity Bond.|
|9.||Form H||Certificate of Export.|
|10.||CST Form I||List of registered dealers.|
|11.||Form II||Alphabetical list of registered dealers.|
|12.||Form IV||Register of Certificate.|
|13.||Form V||Declaration under Rule 15.|
|14.||Form VI||Form of Return under Rule 14A(1) of the Central Sales Tax (Andhra Pradesh) Rules, 1957.|
|15.||Form VII||Notice of Provisional Monthly Assessment and Demand.|
|16||CST Form VIII||Notice of Final Annual Assessment and Demand.|
|17.||Form IX||Notice of Final Assessment and Refund Order.|
|18.||Form XII||Form of Appeal under [Rule 5(2)(a)] of The Central Sales Tax (Andhra Pradesh) Rules, 1957 issued under Section 13(3) and (4) of The Central Sales Tax Act, 1956 (Central Act 74 of 1956).|
|19.||CST Form No XIII||Register of Declarations.|
Exemptions under Central Sale Tax
Central Sales Tax is exempted on these conditions. Here some occasions are mentioned below:
- CST Tax is excluded if outward freight is charged separately and if the outward insurance of goods are passed on to a buyer during dispatch.
- Exempted from Central Sale Tax in the cases when a sale within a particular state.
- No Central Sales Tax is to be paid if goods are returned within 180 days.
- Any sale to a unit in SEZ’s and foreign missions are exempt from Central Sales Tax.
FAQ’s on Central Sales Tax
What are Due Dates of Central Sales Tax?
These are the due dates for CST Tax:
|Particulars||Time for File|
|Quarterly & Monthly Return||21th of the next month|
|Six Monthly Return||30th of the next month|
|Revised Return||Within 8 months of the following financial year|
Who can file a CST return online?
Any dealer who is registered under Central Sales Tax Act, 2003 must file CST Return online. The Dealer must file VAT Return online and then file CST Return online.
When do I have to pay CST?
Sale of goods is considered to take place when the property in goods passes from the seller to the buyer. Also, there are events which do not appear to be a direct sale of goods but are still considered as deemed sales events under the CST legislations. They are:
- Transfer of property in the course of executing a contract involving the provision of material and services (generally termed as a works contract).
- Lease or hire purchase transaction of movable goods (generally termed as the right to use). and
- Transfer of intangible goods, such as goodwill and intellectual property rights. The liability for payment of CST/ VAT lies with the seller, however, the seller can charge the CST/ VAT to the buyer along with the price of goods sold.
What is the Difference Between CST Number and TIN Number?
Central Sales Tax Number (CST No.) is issued by the Commercial Taxes Department to the Assessee under the CST Act. Whereas Taxpayer Identification Number (TIN) is issued by the Commercial Taxes Department to a taxpayer under the VAT Act of the concerned State. Both these are the Registration Numbers under the VAT and CST Acts. But the under Central Sales Tax Act, the CST Verification will be done. In CST TIN Search Link you can get CST TIN Search by name, CST TIN Search by Company Name, Dealer Name, etc.