How do system of VAT & CST works

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Abhishek (Querist)
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10 July 2008 How is the system of VAT & CST works in case of Inter-state sales.
What is the basis and mode of levying and sharing tax revenues on sale?

Sanjeev Kumar

Sanjeev Kumar (Expert)
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10 July 2008 VAT is levy on sales made intra-state @ % specified under respective state VAT Act in a particular item as well CST levy on inter state state i.e. sales made outside that particular state where the dealer situated. under VAT a dealer is eligible to get the input tax credit (ITC) paid on purchase within the state. 1st ITC adjusted towards VAT liability and then if excess towards CST liability and / or claim the refund or c/f, it's optional