CST stands for Central State Tax. It is a kind of indirect tax levied by the Central Government. Describing the process of CST in a nutshell tells us that customers pay CST for the products they use.
Under the process of CST, the sale of goods is termed as Interstate sale in case there is movement of goods from one State to another taking place. Also the transfer of title of goods from one State to another is also placed under the category of interstate sale.
Further, in cases where a product is owned by a company and the stock of the company is being moved from one branch in a state to another branch in another state, no sale taking place is considered. There is only movement of goods from one state to another. In cases like these, CST is obviously not applicable since it is a tax in sale and there is no sale.
However, during transferring stock from one state to another state, the VAT laws of the State require reversal of input tax credit on purchases if such goods are transferred. Form F is required to establish stock transfer.
CST Registration: The way it's done.
Each and every entreprenuer who is required to pay CST needs to register with the sales tax authorities. Also obtaining a VAT/CST/TIN registration after that is mandatory.
In case you a kind of dealer whose business does not effect the interstate sales, a voluntary CST registration can be obtained if you are liable to pay VAT and you do not have to pay tax under CST.
This kind of voluntary CST registration proves to be helpful for the dealers who bring/import goods from some outside state to sale withing a state.
By registering yourself for CST you will be provided with concession in the rate of tax on interstate purchases by using Form C. Also you can claim benefit under section 5(3) of the CST Act by issuing Form H.
The transfer from one branch to another or stock transfer is spared from paying tax by submitting Form F. And also there will be no tax on purchases by a unit in special economic zone.
If you wish to obtain VAT/CST Registration, visit our site eFilingportal.in.
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