Sales Tax-VAT-CST

[CA Bhawna Lakhmani]

Sir,

What is the difference between sales tax, VAT, & CST. My employer company is a manufacturer of garments. If we sell the garments then what kind of tax is applicable for us? Please tell me about the rates and taxes, if we sell the garments in Delhi and outside Delhi.

[YAGAY andSUN]

Sales Tax, VAT and CST all these taxes are leviable on Sales of goods either within state or interstate.  Sales tax is no more in existence.  VAT is leviable with in the state which CST is leviable on insterstate sales.  VAT and CST can be varied from 5% to 14%.

[Dharmnath Avhad]

There is no difference between sales tax and Vat. vat is a system where sales tax is levied on added value. Consttutionally, it is  asales tax. Most of the states adapted the system of taxing the added value by each transaction ,after 1-4-05. which is called vat

CSt means CENTRAL SALES TAX levied on inter state sales.If it is against C form rate of tax, presently is 2 %. if it is without C form, it equal to local rate applicable in respective state.

For rates you can go to vat sites of respective state, go to SCHEDULE AND SEE THE RATES.It is difficult to tell you rates of all states india as they very from state to state

regards

DHARMNATH AVHAD

 

AI Summary

Value added tax applies to intra-state sales; central sales tax governs interstate sales and affects tax treatment of goods. Value Added Tax (VAT) is the state-level system taxing value added on intra-state sales and replaces the older sales tax; rates vary by state. Central Sales Tax (CST) applies to interstate sales and, with the requisite documentary form, attracts a concessional rate; without that form the local state rate may apply. A manufacturer selling garments will face VAT for in-state sales and CST for inter-state sales, with precise rates determined by state schedules and documentary compliance.