Determination of Turnover for CST

Turnover means

the aggregate of the sale prices received and receivable by any dealer liable to CST under this Act

in respect of sales of any goods in the course of inter-State trade or commerce

made during any prescribed period

In simple language, CST is imposed on Selling price in case of interstate sales

What is prescribed period

Prescribed period is the period in respect of which a dealer is liable to submit returns under the general sales tax law of the appropriate State

In simple words, if vat return is quarterly, then CST return is also quarterly and if vat return is monthly, CST return is also monthly

Deductions from Turnover

Following are reduced while calculating CST turnover

• CST Payable
• Goods return within 6 months of delivery of goods and proper evidence of such return and adjustment in books is placed before prescribed authority(Sales tax authority)
• Other deductions which Central Government may prescribe

What items are deducted/not taken while calculating turnover

• Dharmada or charity charges
• Indemnity/Guarantee charges
• Discount
• Excise duty
• Government Subsidy
• Deposits for returnable containers/bottles
• Free of cost material supplied by customer

What are normally included while calculating turnover

• Weightment charges
• Insurance charges prior to delivery
• Packing charges
• Design Charges

Exam Questions

Question 10
Mr. Mani reported inter-State sales of Rs.45,00,000 (inclusive of central sales tax) for the
current financial year. In this regard following additional information is available:
(i) Freight Rs.2,30,000 (Rs.80,000 is not shown separately on invoices)
(ii) Goods sold to Mr. X for Rs.45,000 on 15.05.20XX were returned on 18.10.20XX.
(iii) Mr. Z, a buyer to whom goods worth Rs.30,000 were dispatched on 17.04.20XX, rejected
such goods. The said goods were received back on 18.11.20XX.
Determine the taxable turnover and CST payable, assuming that all the transactions were
covered by valid "C" forms and sales tax rate within the State is 5%

Question 8
Solaris India Pvt. Ltd.‟s total inter-State sales @ 4 % CST for the current financial year is
Rs.1,50,00,000 (CST not shown separately). In this regard, following additional information is
available:
(i) Goods sold to Mr. A for Rs. 1,50,000, on 16.07.20XX were returned by him on 12.12.20XX.
(ii) A buyer, Mr. B, to whom goods worth Rs.55,000 were dispatched on 16.04.20XX, rejected
such goods. The said goods were received back on 15.11.20XX.
(iii) Goods sold to Mr. C for Rs.5,00,000, on 16.04.20XX were returned by him on 12.12.20XX.
Determine the amount of taxable turnover and tax liability of Solaris India Pvt. Ltd.