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Cst set off

Renuka Poojari (Accounts Officer) (65 Points)

24 December 2015

If i m buying goods from other state for which they r charging me full CST which is around 5% and 12.5% as i dont have C forms. Whn i will make VAT payment to govt can i take it as set off and show it in my Vat Report Report.

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8 Replies

Sonu Goenka (Professional) (62 Points)
Replied 24 December 2015

No, you can't set off CST for the payment of VAT/CST.

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Deepak sharma (Learner) (1431 Points)
Replied 24 December 2015

No , you cant do this

Stranger (.) (5531 Points)
Replied 24 December 2015

CST on inter state purchases can't be set-off with Local Sales Tax (under VAT Systems). It should be trated as expenses. Only local sales tax on intra state purchases (i.e. VAT Receivable) can be set-off with local sales tax on intra state sales (i.e. VAT Payable) or / & central sales tax on inter state sales (CST Payable). The reason behind this is that the revenue should go to the same State for the purpose of claiming 'input tax credit'.

Moreover, as far as the payment of sales tax under VAT is concerned, refer the corresponding State laws. Under the DVAT Act, 2004, dealers in Delhi are required to pay or deposit the VAT collected during a month, on or before the 21st day of the subsequent month. The VAT payment or deposit can be made online or through designated nationalised banks.

Hope ur doubt is cleared now...

Madhukar N Hiregange (Chartered Accountant) (39039 Points)
Replied 25 December 2015

If you are reselling the goods, you are eligible for C forms. You should get the form and pay only 2%. Normally sale to ultimate consumers only suffer full CST rate.

Maybe you need to get your registration amended to include all goods traded in to enable C form.

Renuka Poojari (Accounts Officer) (65 Points)
Replied 25 December 2015

ok. Thank u guys.

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AMBUJ SHARMA (CHARTERED ACCOUNTANT) (243 Points)
Replied 25 December 2015

you can't claim CST Input.

CA Anand Kumar (Practicing) (151 Points)
Replied 26 December 2015

VAT Input can Claimed while paying CST but CST cant be clamied to VAT Payment

VELU.P (ACCOUNTS MANAGER) (160 Points)
Replied 26 December 2015

Sales tax is a source of revenue for each state. CST is collected by the appropriate state, which is the state in which the selling dealer’s place of business is located.

Thus, if a dealer in Tamilnadu makes inter-state sale to a dealer of Maharashtra, the CST on such sale will be collected by the state of Tamilnadu.

If the credit on such CST is allowed to the dealer of Maharashtra again VAT payable to the state of Maharashtra, then the revenue of the state of Maharashtra will get reduced. HENCE THE CREDIT IS NOT ALLOWED.

However the Dealer of Tamilnadu can very well use the VAT credit of purchases made from the state of Tamlinadu against the payment of CST on inter-state sales, as the VAT was paid to the state of Tamilnadu only and CST against which is set-off is also payable to the state of Tamilnadu.

There will be no loss of any revenue to the state of Tamlinadu.

Moreover, the Collection and Assessment CST is administered by the State Governments for which a share of CST collected is passed on to the States. If the set off is allowed, it will be a revenue loss to the State Government without a benefit to the state for doing the work on behalf of the Central Government.