There are various categories of sales / purchase which are as follows:-
Interstate Sales or Interstate Purchase
Sale or purchase of goods from one state to another state is called “Interstate Sales or Interstate Purchase”.
Example: A of Gujarat (Seller) sells Goods to B of Maharashtra (Buyer) or vice versa
CST is levied in the above case.
What is CST?
It is central sales tax; the liability to pay the tax is on the dealer who sells the goods in the course of interstate trade or commerce (i.e. from one state to another state).
CST is levied at the turnover of the dealer, there is concessional rate or no tax is charged if Declarations forms are submitted.
What is Concessional Rate?
Concessional rate is a discount given to the dealer on the turnover.
Sales tax liability on interstate sales is @ “2%” on the turnover of the dealer or the rate applicable to the sale or purchase of such goods inside the appropriate state under the sales tax law of that state, whichever is lower that rate is levied.
Otherwise the rate of tax would be the rate which is applicable on the goods sold within that state.
Such concession rate would be applicable if selling dealer provides ‘Form C’ to Tax Authorities as a Proof that the purchasing dealer is eligible to purchase these goods at concessional rate.
- Sale in Transit
An inter-State sale or inter-State purchase which is affected by transfer of document of title to the goods during their movement from one State to Another is called “Sale in Transit”.
E.g:-A of Kolkata Places an order on B of Maharashtra for certain goods and instruct it to deliver it to C of Kerala and A of Kolkata dispatches the goods to C of Kerala.
In the above case sale of goods by A to C is affected by transfer of documents. Documents are transferred to C before goods reach Kerala & C takes delivery thereof.
In the above case Form C,Form E-I/E-II is applicable. For more details kindly click on the below link.
- Branch Transfer or Interstate Stock Transfer
Sometimes dealer sends the goods to his consignment agent to another state,so that the goods can be sold.
Similarly, a dealer may send the goods to his own branch/depot in another state from where such goods can be sold.
In the aforesaid cases, although goods have been transferred from State to another, the property in goods does not pass from principal to the agent .
Thus, there is no sale and consequently no CST is payable provided there was no pre-existing agreement for the sale of the goods so transferred.
Factory at Gujarat Goods are sent from Gujarat H.o to Mumbai Branch at Mumbai
Above illustration shown is an interstate stock transfer
In the above case Form F is applicable please refer to the below link for more details :
- Intra state Sales or Intrastate Purchase
Sales or Purchase within the state is called Intrastate Sales or Intrastate Purchase.
Example : A of Mumbai sells goods to B of Pune and vice versa
VAT is levied in the above case.
- Import and Export
Sales or Purchase from one country to another country is called “Export” & “Import” respectively.
Custom duty is levied in the above case.
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