CST SALES RETURN

[venkat eswaran]

Dear Experts,

WE got our CST sales rejected matls after 2 years. Since it is more than 6 months we are not able to reverse the CST 2 percent paid amount,

but we need to account in sales return. we have accounted in sales return without reversing CST 2 percent .

My question is whether we have to show this transaction in CST Return or Not? Since no CST is revresed. Please give your valuable reply

Thanks & regards

Venkat

[YAGAY andSUN]

Dear Venkat,

You are statutorily required to show such rejected material in the Statutory Returns, though no benefit of tax would be available to you.  If you do not incorporate in your CST Return, then, Department may treat it as purchases from unregistered dealers and may ask to pay the tax on such purchases.

You would have to establish one to one correlation in this regard at the time of conducting VAT/CST assessment with documentary evidences.

Regards,

Team YAGAY & SUN

(Management & Indirect Tax Consultants)

AI Summary

Statutory disclosure of CST sales returns required even if tax reversal is unavailable; maintain documentary correlation to avoid reassessment. Rejected CST sales returned after the reversal period must still be disclosed in CST/VAT statutory returns even though tax reversal is unavailable; omission may lead to treatment as purchases from unregistered dealers and tax demands. Taxpayers must maintain documentary evidence showing one-to-one correlation between the original sale and the returned material for assessment purposes.