CST: Full Form, Objectives, Rules, and Steps

What is the Full Form of CST?

The full form of CST is Central Sales Tax.

What is CST?

The Central Sales Tax (CST) is a tax levied by the Central Government of India on the sale of goods during inter-state trade or commerce. CST ensures revenue sharing between states & regulates trade across state boundaries. Administered by state governments, CST applies to dealers registered under the CST Act, 1956, & helps prevent double taxation while promoting fair trade practices among Indian states.

What are the Objectives of CST?

1. Regulate inter-state trade & prevent unfair competition between states.
2. Ensure uniform taxation for inter-state sales across India.
3. Promote a smooth movement of goods between different states.
4. Prevent double taxation on inter-state sales transactions.
5. Generate revenue for both central & state governments.
6. Maintain transparency & accountability in interstate commerce.

What are the Rules of CST?

• CST applies only to sales executed between two different states.
• Dealers must register under the CST Act for inter-state trade.
• CST is collected by the selling state’s government.
• Form C allows buyers to purchase goods at concessional CST rates.
• The tax rate depends on the type of goods sold.
• Proper documentation is required for claiming exemptions or concessions.

What are the Steps to Register for CST?

1. Visit the state commercial tax department’s official website.
2. Fill in the online CST registration form with business details.
3. Upload required documents like PAN, address proof, & trade license.
4. Apply & pay the prescribed registration fee.
5. Verification is initiated by the tax officer for approval.
6. Receive the CST registration certificate upon successful validation.

Who are Exempted from CST?

• Sales made to government-recognized charitable or educational institutions.
• Inter-state sales are covered under specific export or import transactions.
• Dealers selling exempted goods as listed under the CST Act.
• Registered dealers using Form C for concessional rate transactions.

FAQs

1. Can CST be claimed as an input tax credit?

No, CST is not eligible for input credit.

2. Is CST applicable after GST implementation?

CST applies only to limited petroleum & non-GST goods.

3. What documents are needed for CST return filing?

Invoice copies, Form C/D, & sales transaction records are mandatory.