Important indirect tax for the purpose of taxation. Taxes on sale or purchase of goods in the course of

interstate . Taxes on the sale or purchase of goods within the

state.In the basic scheme of taxation in india , in is

envisaged that:-Central government will get tax revenue from income tax, excise and customs.-State government will get tax revenue for sales tax , excise on liquor and tax on agricultural income.-Municipalities will get tax revenue from octroi and house property.

DealerDealer means any person who carries on

-the business of buying , selling , supplying or distributing goods ,directly or indirectly for cash or for deferred payment or for commission , remuneration or other valuable consideration.

SaleSale with its grammatical variations and cognitive

expressions , means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration.1. a transfer of any goods for cash, deferred payment or other valuable consideration.2. a transfer of property in goods involved in the execution of a works contract.3. a delivery of goods on hire purchase or any system of payment by installation.4. a transfer of the right to use any goods for any purpose.5. the supply of goods by any unincorporated association or body.

Sale can be broadly classified as 1. Inter state sale.2. sale within the state.3. sale during export and import.

According to section 3 , a sale or purchase of goods shall be deemed to take place in the course of interstate trade or commerce if the sale or purchase:

1. Occasions the movement of goods from one state to another.

2. Is effected by a transfer of documents of title to goods during their movement from one state to another.

Section 4(2) states that a sale or purchase of goods shall be deemed to take place inside the state if the goods are within the state.

1) In case of specific or ascertained goods , at the time the contract of sale is made and

2) In case of un-ascertained or future goods at the time of their appropriation to the contract of sale by the seller or by the buyer , whether assent of the other party is prior or subsequent to such appropriation.

Sale in course of exportSection 5(1) of the CST act defines when

a sale or purchase is said to be in course of export of the goods out of the territory of india, only if1. the sale or purchase either occasions such export.2. is effected by a transfer of documents of title to goods after the goods have crossed the customs frontiers of India.

Sale in course of importSection 5(2) of the CST act defines

when a sale or purchase is said to be in course of import of the goods out of the territory of india, only if

1. the sale or purchase either occasions such import.2. is effected by a transfer of documents of title to goods after the goods have crossed the customs frontiers of India.

CST act makes provisions for registration of dealer. Registration brings many advantages (ie) the dealer can issue ‘c’ form and purchase goods at the concessional rate.

1.Compulsory registration under CST act :Section 2(f) states that registered dealer means a

dealer who is registered under section 7 of CST act.

2. Voluntary registrationA dealer registered with state sales tax authorities

may voluntarily apply for registration under CST act even if he is not liable to pay central sales tax.

3. Application for registrationApplication for registration should be made in

prescribed form ‘A’ as per CST rules within 30 days.Application fee Rs 25 is payable.The application has to be signed by

1. proprietor of business.2. One of the partners in case of business owned by partnership firm.3.Karta or manager of HUF.4.Director or principal officer of company.5.Principal officer in case of association of individuals.6. Officer authorized by government in case of government

4.Additional places of business-If the dealer has places of business in different states ,he has to obtain separate registration in each state.-If he has more than one place in the same state he has to get only one registration with additional places of business endorsed on the certificate.

5. Security from the dealer under CST actThe registering authority can ask for proper security from the applicant for realization of taxes due and proper custody and use of forms which are supplied by sales tax authorities for use by the dealer.

6.Other documents required at the time of registration-Particulars of directors and partners.-Copies of memorandum and article in case of company or partnership deed in case of partnership.-Copies of rented agreements.-Nominations as manager.-List of places of business and godowns.-Details of machinery and bankers.-Photograph of directors and partners.

7. Certificate of registration under CST actThe registering authority will ensure that application is in conformity with the provisions of CST act.

8.Amendment of certificateThe certificate can be amended such as change of name, change of business, and change of class of goods.

9.Cancellation of CST registrationRegistration can be cancelled either on request of dealer or by sales tax authorities.