Central Sales Tax Means

Term Central Sales Tax under Indian Tax



This post explained about Central Sales Tax

Central Sales Tax (CST) is a tax on sales of goods levied by the Central Government of India. CST is applicable only in the case of inter-state sales and not on sales made within the state or import/export of sales.

Inter-state sale is when a sale or purchase constitutes movement of goods from one state to another. Accordingly, consignments to agents or transfers of goods to branch or other offices is not a sale as per the CST Act

CST is payable in the state where the goods are sold and movement commences. The tax collected is retained by the state in which the tax is collected. CST is administered by Sales Tax authorities of each state. Thus, the State Government Sales Tax officer who assesses and collects local (state) sales tax also assesses and collects CST.

Sales Tax is a tax, levied on the sale or purchase of goods. There are two kinds of Sales Tax i.e. Central Sales Tax, imposed by the Centre and Sales Tax, imposed by each state

Central Sales Tax or CST is imposed on sale or purchase of goods occurring the course of inter-state trade or commerce. Value Added Tax (VAT) is applicable on purchase or sale of goods within a state, whereas CST is levied on interstate purchase or sale of goods.


CST is applicable when there is inter-state sale or purchase of goods including work contract. Newspapers are exempt from CST. However, mere transfer of goods to a branch or another unit of the same entity would not attract CST. CST applicable only when there is sale or purchase. For a sale or purchase to have occurred under CST regulations, there must be transfer of document of title to the goods during the movement of goods from one state to another.

CST Payment

CST tax is collected and retained by the State from where the transfer or sale takes place. Hence CST payment would be due monthly or quarterly and varies from state to state.

CST – Form C

Under CST regulations, tax liability on inter-state sales is 2% or the rate of tax for sale within State, whichever is lower, provided the sale is effected between a registered dealer and a registered purchasing dealer.

CST Rate of 2% can be claimed if:

Sale is made by a registered dealer and goods sold are covered in the registration certificate of the buying dealer.

Hence, concessional rate of tax is applicable if selling dealer provides proof that purchasing dealer is eligible to get these goods at concessional rate. Form C is thus evidence provided by buying dealer to the selling dealer to avail concessional CST tax rate of 2%.

This post describes about Central Sales Tax.   Comment below your thoughts about this post Central Sales Tax.




Learn Exports Imports Free, Click here

Click here to know GST rate of your goods or service

CGST Act Section 137 Offences by companies

CGST Act Section 138 Compounding of offences

CGST Act Section 139 Migration of existing taxpayers

CGST Act Section 140 Transitional arrangements for input tax credit

CGST Act section 141 Transitional provisions relating to job work

CGST Act Section 142 Miscellaneous transitional provisions

CGST Act section 143 Job work procedure

CGST Act Section 144 Presumption as to documents in certain cases

CGST Act Section 145 Admissibility of micro films, facsimile copies of documents

CGST Act Section 146 Common Portal

CGST Act section 147 Deemed Exports

CGST Act Section 148 Special procedure for certain processes

CGST Act section 149 Goods and services tax compliance rating

CGST Act Section 150 Obligation to furnish information return

CGST Act section 151 Power to collect statistics

CGST Act Section 152 Bar on disclosure of information

CGST Act Section 153 Taking assistance from an expert

CGST Act section 154 Power to take samples

CGST Act Section 155 Burden of proof

Term All Industry Rate (AIR) undeWhat is Non-taxable and GST-free supplies

Term Non-Filers and Late-Filers under GST

Term non-taxable supply under GST

What is Invoice under GST

Non Registered person under GST

Exemptions under GST Registration

Term Net value of taxable supplies under GST

LC advantage exporter

LC advantage importer

LC parties

LCL shipment booking tips

Letter of credit

 Import General Manifest (IGM)

Importance of Bill of Lading

Introduction to this web site.

 Is Airway bill a documents of title?

How to Import to Uganda?

How to import to India from Uganda?

How to export from India to Uganda?




Jaspreet Kaur: Cst refund

revanth: I have read a few articles on export & import in your blog howtoexportimport.com, I require a clarification with regard to the following instance and the sequence of transactions are given below: 1. Petroleum products were procured by an exporter from an Indian refinery on CST basis without payment of any duty as they are intended for exports. 2. Upon export, the goods were found to be defective at customers premises and hence the customer has refused to accept the product. 3. The goods were sent back to India treating it as Reimport and the sale returns documentation has been done in the books. 4. At the time of reimport, equivalent excise duty has been paid to Customs authorities as CVD. 5. Now the products will be rectified by the exporter and will be supplied indigenously by him. View above, please confirm the CST implications on the said transaction. i.e., whether CST needs to be remitted to the refinery on those purchases or need to pay CST on this. Please confirm with the help of any case laws.

Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers