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What is a central sales tax?

What is a central sales tax?

Central Sales tax refers to the tax levied on sales generated during inter-state trade and commerce in a country. It is an indirect, origin-based tax. The State Government Sales Tax officer, who was responsible for the assessment and collection of local (state) sales tax was also made to assess and collect CST.

Who collects central sales tax?

CST is administered by Sales Tax authorities of each state. Thus, the State Government Sales Tax officer who assesses and collects local (state) sales tax also assesses and collects CST. Central Sales Tax or CST is imposed on sale or purchase of goods occurring the course of inter-state trade or commerce.

What is CST with example?

CST is levied when the goods are transferred or at the time of generating invoice whichever is earlier. For example, if sale of goods is moved from Mumbai to Bangalore, CST is levied. The revenue collected as Value Added Tax VAT is meant for central government. The exempted goods are not charged CST.

What are the objectives of Central sales tax Act?

OBJECTIVES OF CST ACT “Provide for the levy, collection, and distribution of taxes on the sale of goods in the course of inter-State trade.” Specification of conditions and restrictions on state laws imposing taxes on declared goods. “To provide for the collection of tax in the event of liquidation of a company.”

What is Central Sales Tax (CST)?

Central Sales Tax (CST) is an indirect tax , origin based tax on customers and is payable in the state where a particular product is sold. CST is charged only on inter-state transactions and any transaction within a state or import/export of goods does not fall under its purview.

What state has the highest sales tax rate?

California has the highest state-level sales tax rate, at 7.25 percent. [2] Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. The lowest non-zero, state-level sales tax is in Colorado, which has a rate of 2.9 percent.

How to charge sales tax?

equalization or excise tax office and apply for a state resale license or seller’s permit.

  • Call or visit the website of your state revenue office to obtain the sales tax rate where your store is located.
  • Research and learn about the taxable products and services in your area.
  • Add sales tax to a customer purchase.
  • What are state and local taxes?

    Definition of State and local taxes State and local taxes means taxes levied by the States, the District of Columbia, outlying areas of the United States, or their political subdivisions. State and local taxes means taxes levied by the States, the District of Columbia, Puerto Rico, possessions of the United States, or their political subdivisions.