CHAPTER-6

1.LEVIED BY CENTRAL GOVERNMENT & COLLECTED BY STATE GOVT. 2.SUBSEQUENT SALE 3.ADMINISTRATIVE AUTHORITIES 4.VAT RULES APPLICABLE 5.PROCEEDS COLLECTED ARE RETAINED BY THE STATE GOVT.- In case of Union Territories proceeds form part of Consolidated Fund of India.

 SUBJECTIVE RATE OF TAX- Rate of tax in the seller’s state The category of goods i.e. declared or undeclared goods The class of dealers i.e. registered or unregistered  STAGE OF LEVY  BRANCH AND CONSIGNMENT TRANSFER  PERIOD OF TURNOVER  DECLARATION  PURCHASE OF GOODS FOR CERTAIN PURPOSES

S.NO.LOCAL RATE OF TAX RATE OF TAX SALE TO REGISTERED DEALER SALE TO OTHER THAN REGISTERED DEALER 1If the goods are generally exempt under local Act nilNil 21%1%( C Form not required)1% 32%2% (C Form not required)2% 4.More than 2%2% Against C FormLocal Rate

 The consideration for sale of any goods less sum allowed as cash discount, “freight, insurance and cost of installation, if charged separately” but includes any other sum chargeable for anything done in respect of goods before delivery.

Any sum charged for by dealer Central Sales tax excise duty Packing material & packing charges Cost of Freight Cost of Insurance Incentive paid to supplier when includible Dharmada (Charity) compulsory Warranty Charges

 Goods returned/ rejected  Cost of installation  Transit insurance  Deposits for returnable containers  Freight and transport charges for delivery of goods  Subsidy paid by Government  Export incentives to seller  Discounts Note: Tax payable to be rounded off to the nearest rupee.

 The following are included in computing gross turnover:  Sale price of goods outside the State  Sale price of the exempted goods  Sale price of the goods sold within the State  Sale price of goods sold in the course of import or export. However, the sale price of the following are not included in computing gross turnover: i) Newspapers, ii) stock and shares and iii) securities

LessTurnover outside the scope of CST a) Turnover sold outside the state b) Sale in the course of import into and export from india c)Turnover of goods sold inside a state d) Branch Transfer and consignment Transfer a) All Exclusions b) All Exemptions from CST GROSS TURNOVER Less Turnover within the scope of CST but exempt or under special category Less CST TAXABLE TURNOVER

 If the amount of sales tax is not included in the sale price. Amount of tax= Rate of CST  If the amount of sales tax is included in the sale price: Amount of tax = Rate of CST * Gross Turnover Rate of CST * Taxable Turnover 100

 COMPUTATION OF TAX Gross Turnover(including of CST)22,50,000 Less:- a) Trade discount64,000 b) Freight, insurance etc.95,000 c)installation charges36,000 d) Goods returned within 6 months62,0002,57,000 Turnover19,93,000 Central Sales Tax 19,93,000*2/10239,078 Taxable Turnover19,53,922

Statement of Taxable Turnover of M/s Arvind Bros. Ludhiana particularsRs. 1. Subsequent Sale to Govt. exempt(Form C) 2. Sale of undeclared goods to Govt. Less. Sales returns Net Sales Less: Tax collected from customers(49,400*4/104) , , Sale of declared Goods to regd. Dealer Less: Tax collected from customers( 39000*4/104) , Sale of undeclared goods to regd. Dealer Less: Tax collected from customers( 83,200*4/104) , Sale of declared goods to other persons Less: Tax collected from customers( 43680*4/104) , Sale of undeclared goods to other persons Less: Tax collected from customers( 46200*5/105) , Sale of undeclared goods to other persons Less: Tax collected from customers( 53000*6/106) Total ,000 3,01,000

particularsRs Tax on sale of undeclared goods to Govt.(2% on Rs 47,500)950 Tax on sale of declared goods to Regd. Dealer (2% on Rs 37,500)750 Tax on sale of undeclared goods to Regd. Dealer( 2% on Rs 80,000)1600 Tax on sale of declared goods to other persons (4% on Rs 42,000)1680 Tax on sale of undeclared goods to other persons (3% on Rs 44,000)1320 Tax on sale of undeclared goods to other persons(6% on Rs 50,000)3000 Total9,300

Computation of CST Basic Rs 50 kg Less : Trade 8% ,60,000 Less :Cash 2% 9,200 4,50,800 Less : goods rejected 50,000 4,00,800 Add : excise 65, Net sales4,66, Add : 9, Gross sales4,75,534.77

PARTICULARSRs 1. Sugar4,00, Newspapers Tobacco(Exempt in M.P.)50, Shares and Securities___ 5. Exports to Canada3,50, Goods sold in M.P.10,00, Inter-State Sale: 10%460, inter-State sale: 2% Gross Turnover24,64,000 Less: Sugar(Exempt)4,00,000 Tobacco(Exempt)50,000 Exports3,50,000 Goods sold in M.P.10,00,000(--)18,00,000 Gross inter- state sales6,64,000 Less: Goods returned within 6 months(--) 20,000 Net Inter-State Sales6,44,000 Less: Tax paid on Sales 1) Sales after return within 6 months( (4,60,000—20,000)=4,40,000*10/11040,000 2)2,04,000*2/102 4,000 44,000 Taxable Turnover6,00,000