Central Sales Tax Act 1956 (CST)

It is common Act for every state

Movement of Goods is from one state to another is the sole

criteria

It is central Act, amended from time to time Ministry of Finance

(Finance Minister)

Types of Transaction/removals
1. Direct Sales :

Dire

les
a
S
ct

Ch

iB
a
n
en

Bangalore C

Maharashtra
Uttar

Prad
esh D

U.S.A.
CST is a collectable Tax , Tax collected to be with the
Maharashtra Government

2. Export Sales

ax
T
o
N

Japan

Maharashtra
USA

3. Stock Transferred
ai
Chenn

A
Maharashtra

a lo
A Bang

AD
elhi

re

1. Direct Sale under CST Act

C
%
2
CST rm
Fo

Chenn

ai

Maharashtra
CST
12.5
C F 0% No
orm

Maximum 2% CST against Form C

Full Rate of Tax without form C
Purchaser to issue form C to A

Guja
rat

2. Stock Transfers (one state to another state

XYZ
XYZ
Chennai

Maharashtra

Transferee
(Transferor)

Gujarat

XYZ

No CST applicable
F form to be issued by Transferee to the transferor
3. Export Sale
Maharashtra

Sale
Sale

Japan

NO TAX

USA

No CST Applicable
Proof of export to be furnished to the Tax Authorities
Export Invoices, bill of lading, bank realisation certificates

Stock Transfers
Maharashtra
ABC

ABC (Chennai)
ABC (Gujarat)
ABC (Bangalore)
ABC (Uttar Pradesh)

Stock Transfers from one state another state do not attract CST ie 0%
(interstate state)
Transferor One who Transfers the goods
Transferee One who receives the goods
Transferee is required to issue CST declaration in form F on a monthly basis
Form F is to submitted to sales Tax authorities at the time of assessment
Non Submission of form F will attract full rate of CST i.e. 12.50% + Interest
One month one form for the transfers effected during the month

High seas Sale

Normal Sale
A

No Tax

Maharashtra

Japan

12.50%
C

Maharashtra

High seas Sale

A

No Tax

Maharashtra
No Tax
C

B
Japan

Conditions
1. A will endorse the documents i.e bill of lading in
favour of C before it reaches custom station
2. C will clear the goods from customs stations with
payment of duties
3. Agreement to be prepared between A and C
incorporating all legal clauses to avoid litigations

Sale in Transit (EI/EII Sales

Normal Sales
Gujarat
Maharashtra
A

B
2% CST Form C
12.50% VAT

C
Maharashtra
EI/EII Sales Sale in Transit
Gujarat

Maharashtra
A

2% CST
0% CST

C
Maharashtra

0% CST

0% CST

Maharashtra Maharashtra

0% CST

F
Maharashtra

G
Maharashtra

Conditions:
1. A should not take delivery
2. L/R should be endorsed in favour of buyer
Exchange of Forms
1. A will issue form C to B
2. C will issue form C to A
3. B will issue E I form to A
4. C will issue E II form to D
5. D will issue form C to C