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Concept of cst

Reshma Golani (student) (190 Points)

30 December 2014

What is the clear concept behind why the credit of cst receivable is nt available??

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5 Replies

Piyush Tanwar (Assistant Manager - Accounts) (1432 Points)
Replied 30 December 2014

Becoz Sales Tax is on the state level. and if other state starts giving credit of purchases made from different states, then it can be the revenue loss of that state. Regards Piyush Tanwar Tiwari & Associates M-9717468521

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Rahul Agarwal (Chartered Accountant) (213 Points)
Replied 30 December 2014

Yes Piyush is right. It is always a cost for the purchaser. No credit available.

surya shekhar (accountant) (108 Points)
Replied 30 December 2014

A registered CST dealer purchases and sells goods outside the state and pays the CST (Central Sales Tax). Generally, the CST paid on purchases from outside the state (i.e., Inter-state Purchases) is neither allowed to set-off against Output VAT (VAT collected on Sales within the state) payable nor against Output CST (CST collected on Inter-state Sales) payable. Thus, the CST paid on Inter-state purchases is treated as part of procurement cost or the cost of purchases. However, in case of Inter-state Sales, Input VAT can be adjusted against Output CST payable during the month.