Presentation Transcript

1. LEVY AND COMPUTATION OF CENTRAL SALES TAX

2. LEVY AND COMPUTATION OF TAX (SEC. 9) LEVIED BY CENTRAL GOVERNMENT AND COLLECTED BY STATE GOVERNMENT: The tax payable by any dealer on sales effected by him in the course of inter- state trade or commerce , shall be levied by the govt. of India and the tax so levied shall be collected by state govt. in the state from which the movement of the goods commenced.
3. LEVY AND COMPUTATION OF TAX (SEC. 9) 2. SUBSEQUENT SALE : In the case of a sale of goods during their movement from one state to another , being a sale subsequent to the first sale in respect of the same goods the tax shall be levied and collected: a) where such subsequent sale has been effected by a registered dealer , in the state from which the registered dealer obtained the form prescribed in connection with the purchase of such goods.
4. b) Where such subsequent sale has been effected by an unregistered dealer in the state from which such subsequent sale has been effected. 3. ADMINISTRATIVE AUTHORITIES: The authorities for the time being empowered to assess , reassess , collect and enforce payment of any tax under the VAT law of the appropriate state shall, on behalf of the govt. of India , assess,reassess,collect and enforce payment of tax, under this act.
5. 4. VAT rules applicable: All the provisions relating to offences , interest and penalties of the general sales tax law of each sate shall apply in relation to assessment , re-assessment, collection and the enforcement of payment of any tax required to be collected under this act in such state.
6. PROCEEDS COLLECTED ARE RETAINED BY THE STATE GOVERNMENT: The proceeds in any year of any tax, including any interest or penalty, levied and collected under this act in any state on behalf of the government of India shall be assigned to that state and shall be retained by it and the proceeds attributable to union territories shall form part of the consolidated fund of India
7. FEATURES OF RATE OF TAX 1. SUBJECTIVE RATE OF TAX: Rates of tax depends upon whether the sale is effected: a) to a registered dealer under the central sales tax or b) to any other dealer. 2. STAGE OF LEVY: Tax levied under the central sales tax act is single point tax , levied at the first stage of sale in the course of inter-state trade or commerce and all subsequent transactions which are covered by section 3(b) of the central sales tax act are exempted from tax.
8. 3. Branch and Consignment Transfer: If the goods are transferred to the branch offices and consignees situated in other states then they are not taxable because such transfers are not sales. 4. PERIOD OF TURNOVER ( RULE 11): The period of turnover in relation to any dealer liable to pay tax under this act shall be the same as the period in respect of which he is liable to submit returns under the general sales tax law of the appropriate state.
9. 5. DECLARATION ( RULE 12)- The declaration and the certificate referred to in sec 8 (4) shall be in form C. 6. PURCHASE OF GOODS FOR CERTAIN PURPOSES (RULE 13): The goods referred to in sec 8 (3)(b) which a registered dealer may purchase, shall be goods intended for use by him as raw materials, processing materials ,machinery, plant, equipment, tools , stores, spare parts, accessories, fuel or lubricants in the manufacture of goods for sale, or in mining or in the generation or distribution of electricity or any other form of power.
10. SALES – GOODS RETURNED (SECTION 8A(b) ) When the goods sold are returned within a period of six months from the date of sale then the deductions of the amount of such goods is deductible from the gross turnover . Further the claim of such goods returned is to be made in the assessment year in which goods are sold.
11. SALES – GOODS RETURNED (SECTION 8A(b) ) Rule 44 of the U.P. sales tax rules states that if the goods are returned by the purchaser to the dealer within six months of the date of delivery of goods , the price of the said goods is liable to be deducted from the amount of turnover of sales. In similar case , the tribunal has found on the facts and the materials on record that the goods had been returned within a period of 6 months and therefore necessary deductions must be allowed from the turnover .
12. SALES GOODS REJECTED Return of goods and rejection of goods stand on different footings . In the former case, the sale is completed however for one or other reason the goods are returned, whereas in the case of rejection of goods the sale is not complete , because the goods are not accepted by the purchaser on the ground. Hence , it is allowed as deduction even after 6 months.
13. SALES GOODS REJECTED If the goods are not according to the specifications or are of sub-standard quality etc. There is no completed sale and no property in goods transferred to the purchaser , and hence there is no sale of goods within the meaning of the central act or the sale of goods act. It may be noted the time limit given in this section does not apply to the rejection of goods.
14. TAX TO BE COLLECTED ONLY BY REGISTERED DEALERS (SEC 9A) NO person who is registered dealer shall collect in respect of any sale by him of goods in the course of inter-state trade or commerce any amount by way of tax under this act ,and no registered dealer shall make any such collection except in accordance with this act and the rules made there under.
15. ROUNDING OFF OF TAX etc. (sec 9B) The amount of tax , interest , penalty , fine or any other sum payable , and the amount of refund due, shall be rounded off to the nearest rupee and , for this purpose ,where such amount contains a part of a rupee consisting of paisa, then, if such part is fifty paisa or more , it shall be increased to one rupee and if such part is less than fifty paisa , it shall be ignored.
16. 1. Any some charge for by dealer: Sale price includes any some charged for any thing done by dealer in respect of goods at the time or before the delivery of goods including design charges or weightment charges.

    INCLUSION IN SALE PRICE

17. 2. Central sales tax: CST is always includible, whether or not shown separately in invoice. 3. Excise duty: The excise duty is always includible in sale price. Sales tax is payable on excise duty whether or not shown separately in invoice and even if paid directly by purchaser. 4. Packaging material and packaging charges: Sales tax leviable on packaging material . 5.Cost of freight: It is includible only if freight is not shown separately or contract is for sale for destination.
18. 6.Cost of insurance: It is includible only if insurance cost is not shown separately in invoice or contract is for destination. 7. Incentive paid to supplier when includible: Any subsidy paid to supplier directly or otherwise to ensure scheduled delivery is regarded as component of selling price . 8.Dharamda(charity) : Amount collected for payment to charitable organization is taxable and is included in sale price.
19. EXCLUSIONS IN SALES TAX Goods returned/rejected : Sale price of goods returned is deducted from ‘aggregate sale price if goods are returned by buyer within six months of sale. However, period of six months is not applicable in respect of rejected goods . Cost of Installation and Commissioning : It is excluded if shown separately in invoice from sale price.
20. Transit insurance: This charge is incurred at the request by buyer and are excluded from sale price . Deposits for returnable containers: Deposits taken for returnable bottles or tin containers are not sales. Even if the customer does not return the container within stipulated time and security deposit is forfeited.
21. Freight and transport charges for delivery of goods : CST is payable on ex-works price and freight is excluded from sale price. Subsidies paid by government: These received from government of India under fertilizer control order is not part of sale price . Export incentive to seller : Reimbursement of excise duty as cash assistance is not includible as it cannot be held on behalf of buyer. Discount: Cash discount ,trade discount and quantity discount are excluded from sales price.
22. Determination of Turnover (Section 8A) Following steps are taken in determining turnover under the CST Act: 1.Computation of Gross Turnover 2.Computation of Gross Inter-State Sales 3.Computation of Net Inter-State Sales 4.Computation of Taxable Turnover 5.Computation of Tax.
23. COMPUTATION OF GROSS TURNOVER The following are included in computing gross turnover: a) sale price of goods sold outside the state b) sale price of goods sold within the state c) sale price of goods sold in the course of import /export d) sale price of exempted goods e) sale price of inter-state sales NOTE: Sale Price of newspaper, stock and securities are not included.
24. Computation of Gross Inter-State Sales 2.Following items are deducted from gross turnover to ascertain gross inter-sate sales: a) goods sold outside the state b) exempted goods c) goods sold within the state d) goods sold in the course of import/export
25. COMPUTATION OF NET INTER-STATE SALES NET INTER-STATE SALES= Gross Inter-State Sales - sales return(within 6 months) - rejected goods(no time limit) - cash discount - transportation charges, freight and delivery charges (charged separately ) - deduction prescribed by central govt.
26. COMPUTATION OF TAXABLE TURNOVER TAXABLE TURNOVER= Net Inter-State Sales - Subsequent Sale - Goods Exempted from Tax u/s 8(2A) - Amount of sales tax (if included in sale price)
27. COMPUTATION OF TAX