The central sales tax is a tax imposed on inter-state trade or sales of goods. It is imposed by the central Government of India. It is applicable only in the case of inter-state sales and not on sales and not on sales made within the state or import/export of sales. The Central sales Tax is an indirect tax levied on consumers which was enacted under the central tax Act in 1956. CST is payable in the state where the goods are sold and movement commences. The state government which collected the tax gets the tax revenue also.

INTER STATE SALES

Any transaction between two parties from different states records the movement of goods then it is called interstate transaction.

A sale affected by transfer of documents of title to goods when goods are in inter- state movement is also an interstate sale.

However, transfer of goods to branch or other offices or consignments to agents are not considered as interstate sale.

Goods that are sold within a state, but while transporting travel through another state is not considered inter-state sales.

OBJECTIVES OF CST ACT

To outline the principles for determining Inter state sale or sale outside a state or import sale or export sale.

Declaring certain special importance goods(Declared goods)

Provide for the levy, collection and distribution of taxes on sale of goods in the course of inter-state trade.

Specification of conditions and restrictions on state laws imposing taxes on declared goods.

To provide for collection of tax in the event of liquidation of a company.

CONDITIONS FOR CST ACT TO BECOME APPLICABLE

The sale should not take place in course of import into or export from india

The registration of the dealer under the CST Act.

The sales of goods should be made by the dealer to any buyer whether registered or not.

He should make sale of any goods.

The sale should be made in course of interstate trade or commerce.

REGISTRATION PROCEDURE

To registered for CST, it is mandatory for all Manufacturers/Traders/Dealers/Exporters to obtain his tin registration number first. TIN is abbreviated for Tax payer identification number allotted by commercial tax department of the respective states VAT as an unique number. It is a single number allotted to the dealers for the purpose of registration of VAT and CST.

DOCUMENTS REQUIRED TO APPLY TIN REGISTRATION

1. ID proof

2. Address proof

3. PAN card of proprietor

4. Four to six photographs

5. Address proof of business premises

6. First sale/purchase invoice

7. Copy of LR/GR & payment /collection proof with bank statement

8. Surety/Security/Reference

IMPORTANT FORMS UNDER THIS ACT

FORM D- form D is issued by the government department which purchase the goods in order to avail the following concession.

4% tax or applicable sales tax rate for the particular sale within that state whichever is lower.

FORM I – form I is issued by a dealer/buyer located in a special Economic zone in order to avail the following concession.

No tax is imposed on the sale made to a dealer located in special economic zone (SEZ)