STUDYING A PROCEDURE

ON CENTRAL SALES TAX

Submitted by:- Rimpy

rana
MBA 3RD SEM

COMPANY PROFILE
TheNitin

Mittal & Co. was formed in August 2001as

a Chartered Accountancy firm. . The said concern is a
partnership concern based out of Delhi having its branch
office at Meerut, Gurgaon & Noida. With the aim of
providing acomprehensiverange of services in the field
of Finance, IT Enabled /BPO,Consultancy,
Manufacturing,FMCG Distributors/ Retail etc. With soaring
aspiration and zeal to succeed, the Firm endeavours to be
recognized as reputed professional managed . An
innovator in Financial, Management Consultancy, Risk
Management, Auditing, Taxation and Corporate Laws
provides services to the institutional clients. Office is
staffed by people who understand the business culture,
management requirements and multiple laws and possess
the professional expertise that the market demands.

Vision
" WORK TO INSPIRE OURSELF & OTHERS" and be
the obvious choice for financial management,
assurance and other specialized services.
Mission
To enhance decision-making and improve
organizational performance through financial
management, assurance and other specialized
expertise. We act with integrity, objectivity and
a commitment to excellence and the public
interest.

SERVICES OFFERED
Auditors,
Company

Formation & Registration,

Company Formation Advisors,
Statutory Audit (Limited Company),
Tax Consultants,
Tax Return Services

INTRODUCTION
Central

Sales Tax(CST) is a tax on sales of

goods levied by the Central Government of
India.CSTis applicable only in the case of
inter-state sales and not on sales made
within the state or import/export of sales.
Inter-state sale is when a sale or purchase
constitutes 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.

CSTis

payable in the state where the goods are sold

and movement commences. The tax collected is
retained by the state in which the tax is
collected.CSTis administered by Sales Tax
authorities of each state. Thus, the State Government
Sales Tax officer who assesses and collects local
(state) sales tax also assesses and collectsCST.

Sales

Tax is a tax, levied on the sale or purchase of

goods. There are two kinds of Sales Tax i.e. Central
Sales Tax, imposed by the Centre and Sales Tax,
imposed by each state.

OBJECTIVE
1. Formulate principles for determining when a sale
or purchase of goods takes place :- in the course of interstate trade or commerce ;
or
- outside a State ; or
- in the course of import into or export from India.
2. Provide for the :- levy of
- collection and
- distribution
Of taxes on sales of goods in the course of interstate
trade or commerce.

3.

Declare certain goods to be of

special importance of inter state trade or
commerce.
4. Specify the restriction and
conditions to which state laws imposing
taxes on the sale or purchase of such goods
of special importance shall be subject.
5. Provides for collection of tax in the
event of liquidation of a company.
6. Authority to settle disputes in
course of interstate trade or commerce.

WHAT ARE THE CONDITIONS FOR

CST ACT TO BECOME APPLICABLE.
1.The sale should not take place in the course
of import into or export from India.
2. There should be a Dealer and such dealer
must be registered under the CST Act.
3.He should made a sale to any buyer
( registered dealer or unregistered dealer)
4.He should carry on any business.
5. He should made a sale of any goods
( declared or undeclared)
6.The sale should be made in the course of
interstate trade or commerce ( i.e. the sale
should not be a sale inside a state.

RATE OF CST

In

an inter-state sale to a registered dealer against form

C the rate of CST is 4% or local sales tax rate whichever
is lower.
If under the local sales tax law, sale or purchase is
exempt from CST the CST is Nil.
In an inter-state sale to government against form D the
rate of CST is 4% or local sales tax rate whichever is
lower.
Rate of CST in case of inter-state sale of declared goods
without form C or D is twice the rate of tax applicable to
the local sale or purchase of such goods in that state.
Rate of CST in case of other goods ( i.e. non-declared
goods) is 10% or the applicable local sales tax of that
state, which ever is higher.

CST Transaction Forms

Dealers

have to issue certain declarations in

prescribed forms to buyers/sellers. The type
of forms areC, D, E1, E2, F, HandI. Forms
C, E1, E2, F and H are printed and supplied
by Sales Tax authorities. Dealers have to
issue declarations in these forms printed and
supplied by the Sales Tax authorities. Form D
is to be issued by government organization
departments making purchases. These forms
are to be prepared in triplicate.

Registration under CST Act

Everydealerwhocarriesoutthe

inter-state
sales is liabletopay Central SalesTax. As per
the CST Act, every dealer who carriesout
inter-state sales has to be registered with the
SalesTax Authority. Intermediaries like agents
and transporters are not required to be
registered, since they do not affect sales.
Registered dealers canpurchase goodsat
concessional rates by issuing theC Form.