Central Sales Tax (CST) is a tax on Sale levied by Central Government under the provisions of Central Sales Tax Act, 1957. As per the provisions of this Act, any movement of goods from one State to another on account of :-
(a) sale/purchase, or
(b) Transfer of document of Title to goods between two separate parties is considered as Interstate sale/purchase.
All such transactions are liable to CST.
Any movement of goods otherwise than as sale (i.e. stock transfer to Branch, Depot, Consignment Agent or for Job work etc) , sent outside the state , is exempted from levy of CST.
Any movement of goods, sent outside the country , is exempted from levy of CST. Example Exports, or Deemed Exports.
Also some of the Interstate transactions are exempted if goods are supplied to Special Economic Zones or to UN or Diplomatic missions etc.
The basic CST Rate as applicable to inter-state transactions is @2% but this basic rate or exemption from CST would apply if purchasing dealer issue the prescribed statutory forms to the selling dealer.
Some of the points relating to CST rates are as follows: