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CST, Central Sales Tax

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The Central Sales Tax (CST) is a indirect tax levied in India on the sale of goods and services by businesses located in the country. It is a concurrent tax, meaning that it is levied by both the central government and state governments.

Rate of CST:

  • The standard rate of CST is 18%.
  • However, there are some exemptions and reduced rates for certain items and businesses.

Applicability:

  • CST is applicable to all taxable persons whose turnover exceeds the threshold limit of Rs. 1 crore in a financial year.
  • It is also applicable to persons who are required to register under the Central Goods and Services Tax Act (CGST).

Modes of Payment:

  • CST is payable monthly or quarterly, depending on the turnover of the business.
  • Payment can be made through electronic banking or challans.

Refunds:

  • CST is eligible for refund if the business is registered under the CGST Act and has paid more tax than due.

Exemptions:

  • Some items, such as food grains, seeds, and medicines, are exempt from CST.
  • Certain businesses, such as small businesses and agricultural producers, are also exempt from CST.

Compliance:

  • Businesses are required to register for CST if their turnover exceeds the threshold limit.
  • Businesses are also required to file monthly or quarterly returns, as applicable.

Key Points:

  • CST is a concurrent tax levied in India on the sale of goods and services.
  • The rate of CST is 18%, but there are exemptions and reduced rates.
  • CST is applicable to all taxable persons whose turnover exceeds the threshold limit of Rs. 1 crore.
  • The tax is payable monthly or quarterly.
  • Businesses are required to register for CST and file returns.

FAQs

  1. What is CST in terms of tax?

    CST, or Central Sales Tax, is a tax levied on the sale of goods during inter-state trade or commerce in India. It is governed by the Central Sales Tax Act, 1956, and is applicable when goods are sold from one state to another.

  2. How is CST calculated?

    CST is calculated as a percentage of the sale price of goods in inter-state transactions. The general CST rate is 2% if the buyer provides a valid C Form; otherwise, the rate is determined by the VAT rate applicable in the sellerโ€™s state.

  3. What is the difference between GST and CST tax?

    GST (Goods and Services Tax) is a unified tax that replaced CST. CST was only applicable on inter-state sales of goods, while GST covers both goods and services across intra-state and inter-state transactions under a single tax structure.

  4. Who is liable to pay CST?

    The seller is liable to pay CST when goods are sold to another state. However, the tax amount is often passed on to the buyer as part of the sales price.

  5. What is the full form of VAT and CST?

    VAT stands for Value Added Tax, and CST stands for Central Sales Tax. Both were forms of indirect taxes applied before the introduction of GST.

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