what rate is applicable on sales outside state

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rajeev ranjan (Querist)
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18 June 2011 VAT rate on pacemaker in Bihar is 5% effective from 01.04.2011.WE are selling our pace makers in jharkhand at the rate of CST@4%.
Is it correct rate or we should charge cst @ of vat rate of bihar

Suresha R

Suresha R (Expert)
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18 June 2011 If the purchases made within the state (@ rate 12.5% VAT) and we sale that item to interstate with CST rate (@4%), please note that at that time Tax input credit is more than output tax, then is it possible to adjust that excess input credit to next month return?
Please clarify these things.
Srinivas Bhat

A Bill namely, the Taxation Laws (Amendment) Act, 2007 (Bill No. 13/C of 2007) had been introduced & passed in Lok Sabha in order to further amend the Central Sales Tax Act, 1956.and amendments done by this bill are applicable from 01.04.2007.

The net main effect of the amendments is as follows:-

The rate of CST on inter-State sale to registered dealers (against Form-C) shall stand reduced from 4% to 3% or the rate of VAT applicable in the State of the selling dealer, whichever is lower.(Present rate of CST Is 2 %)
The rate of CST on inter-State sale other than sale to registered dealers shall be the rate of VAT applicable in the State of the selling dealer.
The rate of CST on inter-State sale to Government Departments shall also be the rate of VAT applicable in the State of the selling dealer, indicated at (b) above. The facility of inter-State purchases by Government Departments against Form-D stands withdrawn.

Read more: CST RATE WITHOUT C FORM D FORM INPUT TAX CREDIT IN INTER STATE SALE | SIMPLE TAX INDIA-ITR FORM -TDS RATE 11-12

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
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19 June 2011 If you are getting C form against this sale then you should charge CST@2%. Otherwise it has to be rate of VAT prevailing in the state of selling dealer that is in your case 5%. So if you are not getting C form then you should charge CST@5%.

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MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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19 June 2011 Dear Srinivas Bhat
If you are selling some goods in interstate business without 'C' form then you should charge the rateapplicable i.e.12.5%. If you are selling to a RD against 'C'form then the rate applicable is 2%.Naturally,in the second case the input tax is higher than the outputtax,and you willbe eligible for refund for adjusting the same against other tax liability.
MJK

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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19 June 2011 There are two type of dealers. One is Registered and the Other one is unregistered. If you are selling goods to a Register dealer in interstate transaction then you have to procure "C" Form. At the time of sale you do not know that "C" form shall be available to you or not after the transaction is completed. This does not mean that you will treat the said dealer as unregistered dealer. Hence, you can charge only 2% CST to that particular dealer. The C form if not collected from the dealer then at the time of assessment you have to bear the additional tax liability for the C forms not collected by you even the sales was executed to a registered dealer.

Now, in case of unregistered dealer you will not get the "C" form and therefore either 12.5% or the rate of VAT which ever is lower is to be charged as CST. This not a question whether the set off credit is more or less as you have not sold the goods within the state.

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