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
- 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
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%
Computation of Mr. Mani’s taxable turnover and CST payable
|Total inter-State sales||45,00,000|
|Less: Freight shown separately in the invoices [Freight||1,50,000|
|not shown separately in invoices is not deductible]|
|Goods returned by Mr. X [deductible as returned||45,000|
|within 6 months]|
|Goods rejected by Mr. Z after 6 months [deductible|
|although returned after 6 months, as it is a case of|
|an un-fructified sale]||30,000||2,25,000|
|Turnover (including CST)||42,75,000|
|Taxable turnover (rounded off) [Rs. 42,75,000 × 100/102]||41,91,176|
|CST @ 2% [Rs. 42,75,000 × 2/102]|
|Since transactions are covered by valid 'C' Form, CST is 2%|
|or sales tax rate within the State (5%), whichever is lower, i.e., 2%|
|CST payable (rounded off)||83,824|
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
(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.
Computation of taxable turnover and tax liability of Solaris India Pvt. Ltd.
|Less: Goods returned by Mr. A||1,50,000|
|(deductible as returned within 6 months)|
|Goods returned by Mr. C||Nil|
|(not deductible since returned after six months)|
|Goods rejected by Mr. B after six months (Refer note below)||55,000|
|Sale price including CST 1,47,95,000||1,47,95,000|
|Less : Central sales tax [1,47,95,000 × 4/104] (Rounded off)||5,69,038|
Note: The period of six months for return of goods is not applicable in respect of rejected
goods as it is a case of un-fructified sale.