History of Central Sales Tax:
Central Sales Tax was introduced in 1956 as a part of the Constitution of India. The tax was introduced to encourage the free movement of goods between states by providing a uniform tax structure across the country. Before the introduction of CST, each state had its tax structure, which made it difficult for traders to do business across state borders.
Purpose of Central Sales Tax:
The primary purpose of Central Sales Tax is to provide a uniform tax structure across the country and to promote inter-state trade. The tax is levied on the sale of goods during interstate trade and is collected by the state where the seller is located. The revenue generated from the tax is shared between the Central and State Governments in a predetermined ratio.
Features of Central Sales Tax:
Central Sales Tax is levied on the sale of goods during interstate trade. The tax rate varies from state to state and is determined by the State Government. The revenue generated from the tax is shared between the Central and State Governments in a predetermined ratio. The tax is collected by the State Government where the seller is located. The tax is not levied on the sale of goods within a state or on the sale of goods during intrastate trade.
In recent years, Central Sales Tax has been replaced by the Goods and Services Tax (GST), which is a uniform tax structure that applies to the entire country. GST has replaced all previous taxes on the sale of goods and services, including Central Sales Tax. The introduction of GST has simplified the tax structure in India and has made it easier for businesses to do business across state borders.
Conclusion
Central Sales Tax was introduced to provide a uniform tax structure across the country and to promote inter-state trade. The tax is collected by the State Government where the seller is located and is shared between the Central and State Governments in a predetermined ratio. While Central Sales Tax has been replaced by GST, it remains an important part of the history of taxation in India.
Other Related Blogs: Section 144B Income Tax Act
Q: What is Central Sales Tax (CST)?
A: Central Sales Tax is a tax levied by the Central Government of India on the sale of goods in interstate commerce. The tax is collected by the State Government where the seller is located, but the revenue generated from the tax is shared between the Central and State Governments in a predetermined ratio.
Q: When was CST introduced in India?
A: CST was introduced in 1956 as a part of the Constitution of India.
Q: Why was CST introduced?
A: CST was introduced to provide a uniform tax structure across the country and to promote inter-state trade. Before the introduction of CST, each state had its tax structure, which made it difficult for traders to do business across state borders.
Q: Who is liable to pay CST?
A: The seller of goods during interstate trade is liable to pay CST. The tax is collected by the State Government where the seller is located.
Q: What is the rate of CST?
A: The tax rate varies from state to state and is determined by the State Government. The rate may vary between 0% to 5%, depending on the type of goods being sold.
Q: Is CST applicable to intrastate trade?
A: No, CST is not applicable on the sale of goods within a state or on the sale of goods during intrastate trade.
Q: What is the difference between CST and GST?
A: CST was a tax structure that applied to the sale of goods during interstate trade, whereas GST is a uniform tax structure that applies to the entire country, including the sale of goods and services. GST replaced all previous taxes on the sale of goods and services, including CST.
Q: When was GST introduced in India?
A: GST was introduced in India in July 2017.
Q: Is CST still applicable in India?
A: No, CST has been replaced by GST in India.
