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.

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.