CST = Central Sales Tax
If customer issues the C-Form then 2% CST is applicable
otherwise full tax is applicable. that means it saves tax.
After delivery of material we have to collect the C-Form
from the party otherwise it is a liability during sales tax
Meaning if CST is Central Sales Tax ,Tax given to Central
govt.C form is the form issued by the purchaser to seller
in the event if inter state transfer of goods.Purchaser has
to apply for that form from the sales tax dept showing the
details of transaction done with a party during a quarter.
Benefit of c form is that i is the certificate showing that
the purchase done in a concessional rate of tax than the
normal rate of tax on the goods.For example if A in
Maharashtra purchase goods from B in Gujarat on which 12.5%
tax is applicable,A has to pay full tax on that material
ie.12.5% if A is not issuing C-form to B and if A give C-
form A will get goods in a concessional rate,now it is 2%
and depends on the material and Place(ie uninon
territories).B has to produce this C form to the dept while
the time of assessment.
This amendment also authorized Parliament to formulate
principles for determining when a sale or purchase takes
place in the course of inter-State trade or commerce or in
the course of export or import or outside a State.
Accordingly the Central Sales Tax (CST) Act, 1956 was
enacted which came into force on 05.01.1957. Originally, the
rate of CST was 1%, which was increased first to 2%, then to
3% and w.e.f. 1st July, 1975 to 4%. The CST Act, 1956 Act
provides for declaration of certain goods to be of special
importance in inter-State trade or commerce and lay down
restrictions on the taxation of such items. The entire
revenue accruing under levy of CST is collected and kept by
the State in which the sale originates. The Act excludes
taxation of imports and exports.
CST being an origin based tax, is inconsistent with Value
Added Tax which is a destination based tax with inherent
input tax credit refund. An amendment to the Central Sales
Tax Act to provide for reduction of the rate of Central
Sales Tax for inter-State sales between registered dealers
from 4% to 3% w.e.f. 1st April, 2007 was effected in.
Through this amendment, facility of inter-State purchases by
Government Departments at concessional CST rate, against
Form-D has been withdrawn. After this amendment, the rate of
CST on inter-State sales to Government will be same as VAT/
State sales tax rate.
Central Sales Tax rate has been further reduced from 3% to
2% with effect from 1st June, 2008. Reduction of CST rate
first from 4% to 3% & then from 3% to 2% has been done as a
precursor to the introduction of Goods & Services Tax (GST),
as CST would be inconsistent with the concept & design of GST.
i am work partnership firm in Uttrakhand. one of our
branch established in haryana.and our branch give raw
material to another parti in haryana.and same parti supply
semifinished component to our branch(uttrakhand). mentain
excise duty & c.s.t in bill.and we enter these bill in
purchase A/c.instead of job work expenses. so question is
that can we able to deduct T.D.S ON these bill.pls explain
me in which section we deduct t.d.s. if not, why.