distribution and scm

8/7/2019 DISTRIBUTION AND SCM

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DISTRIBUTION AND SCM

FISCAL LEVIES

Presented to: Prof Seema sharma

By:Aashish pandeyTimir Vasa


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CONTENTS

CST

LST

EXCISE DUTY

OCTROI


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CENTRAL SALES TAX

Sales Tax is a levy on purchase and sale ofgoods in India. Sales Tax is levied underauthority of both Central Legislation (CentralSales Tax) and State GovernmentsLegislations (Local Sales Tax).

Central Sales Tax is governed by the Central

Sales Tax Act, 1956 which covers inter-statetransactions of sale of goods as well astransactions of import of goods into or exportof goods out ofIndia


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OBJECTS AND BASIC SCHEME OF CST

Act To formulate principles for determining (a) when a sale

or purchase takes place in the course of inter-statetrade or commerce (b) When a sale or purchase takesplace outside a State (c) When a sale or purchase takesplace in the course of imports into or export from India

To provide for levy, collection and distribution of taxeson sales of goods in the course of inter-state trade orcommerce

To declare certain goods to be of special importance ininter-State trade or commerce and specify therestrictions and conditions to which State lawsimposing taxes on sale or purchase of such goods ofspecial importance (called as declared goods) .


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Basic scheme of CST

Sales tax revenue to states

Tax on interstate sale of goods.

State sales tax law applicable in manyaspects.

CST act defines some concepts.

Declared goods


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Background of CST

Sales Tax is one of the most importantIndirect Tax for purpose of taxation by StateGovernments. Revenue from CST goes toState from which movement of goodscommences. Total CST revenue in 98-99 wasRs 8,538 Crores. Revenue of some majorStates was - Maharashtra - Rs 1,442 Crores.Tamilnadu - Rs 934 Crores. West Bengal - Rs799 Crores. Gujarat - Rs 787 Crores, Haryana -Rs 739 Crores. [ET, Bom 21.7.2000].


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Rate of Central Sales Tax

In case where local sales tax rate is 4%, CST applicable incase of sale to unregistered dealer will be only 4% asagainst 10% as was applicable upto 31-3-2007. In case of

sale to registered dealers, the CST rate will be 2% w.e.f.1-6-2008 [The rate was 3% during 1-4-2007 to 31-5-2008

and 4% prior upto 31-3-2007].

In case where local sales tax rate is 12.5%, CST applicable

in case of sale to unregistered dealer will be 12.5%. Thisposition is same as was applicable upto 31-3-2007. In caseof sale to registered dealers, the CST rate will be 2%w.e.f. 1-6-2008 [The CST rate was 3% during 1-4-2007 to31-5-2008 and 4% prior upto 31-3-2007].


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LOCAL SALES TAX

The Local Sales Tax is governed by the

respective State Sales Tax Acts under which

tax is levied on intra-state transactions ofsales.


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VALUE ADDED TAX

Value Added Tax, or VAT, is levied on top of

the cost of a product or service and

generates revenue for a government. Value Added Tax, popularly known as VAT,

is a special type of indirect tax in which a

sum ofmoney is levied at a particular stage

in the sale of a product or service.


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What are the benefits of VAT

It is Simple, Transparent and Progressive.

Business friendly system of taxation.

Reduction in number of tax rates to only 2main rates i.e. 4% and 12.5%.

Reduction in effective tax rates in manygoods.

Simplification in tax forms and procedure. Elimination of Tax on Tax existing in sales

tax system.


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Types of Business liable for

VAT Importers

Manufactures

Distributors Wholesalers

Retailers


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How is VAT charged

Vat is not a cost to dealers.

Vat as separate amount on a Bill orCash

Memorandum.


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EXCISE DUTY

What is Excise duty

EXCISE DUTY is an indirect tax levied andcollected on goods manufactures in India.


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EXCISE DUTY

An excise is an indirect tax, meaning that the

producer or seller who pays the tax to the

government is expected to try to recover thetax by raising the price paid by the buyer (that

is, to shift or pass on the tax)

Excises are typically imposed in addition to

another indirect tax such as a sales tax or VAT


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EXCISE DUTY

Three types of excise duty.

1. Basic Excise Duty

2. Additional Duty of Excise3. Special Excise Duty


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Basic Excise Duty In India

Excise Duty, imposed under section 3 of the

Central Excises and Salt Act of1944 on all

excisable goods other than salt produced ormanufactured in India, at the rates set forth

in the schedule to theCentral Excise tariff

Act, 1985, falls under the category of Basic

Excise Duty In India


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Additional Duty of Excise

Section 3 of the Additional Duties of Excise

Act of 1957 permits the charge and collection

of excise duty in respect of the goods as listedin the Schedule of this Act. This tax is shared

between the Central and State Governments

and charged instead of Sales Tax.


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Special Excise Duty

According to Section 37 of the Finance Act, 1978,Special Excise Duty is levied on all excisablegoods that come under taxation, in line with the

Basic Excise Duty under theCentral Excises andSalt Act of 1944. Therefore, each year theFinance Act spells out that whether the SpecialExcise Duty shall or shall not be charged, and

eventually collected during the relevant financialyear.


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OCTROI

It is a tax charged by municipality or local

body on the goods and commodities brought

into town. The rate of Octroi Duty varies from local area

to local area

It is only levied in Maharastra in india.

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