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CST ( Central Sales Tax)-
Inter-State-Sale

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 sale/purchase or 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, sent outside the country, is exempted from levy of CST. Examples of such Transactions are Consignment and Branch Transfers outside the sate, Exports, Deemed Exports etc.

Accordingly, Sales can be classified into 3 categories :

  • IntraState Sales i.e. Sales within the State.
  • Sales during Import and Export
  • Inter-State Sales
The Provisions of the CST Act apply only in respect of InterState Sales and not IntraState Sales, or Import or Export Sales.

An inter-state sale takes place when a sale or purchase:

  • Leads to movement of goods from one State to another State.
  • Is achieved by the transfer of documents of title while the goods are being moved from one State to another State.

Example 1: “A” in Andhra Pradesh sells and delivers goods to “B” in Karnataka.

 

Example 2: “A” in Maharashtra delivers goods to “B” in Gujarat. “B” sells it to “C” in Gujrat by transferring the document of title during the goods movement from Maharashtra to Gujrat.

Note: Goods that are sold within a state, but while transporting travel through another state is not considered inter-state sales.

  • State specific CST Returns.
  • Tracking of forms:
    • C forms – (Issuable/Issued/Receivable/Received).
    • E1, E2 Forms – Issued against sale of goods in transit by the buyer.
    • F forms – For Consignment sales and Branch Transfer.
    • H Forms – for sale in course of exports.
    • D Forms – For sale to Govt. Organisations.
    • I Forms – For sale to SEZ customers.
  • Reminder Letters/Covering letters to customers.
  • Auto-Fill option.

Activating CST in Tally.ERP 9

To Activate CST features in Tally.ERP 9

Go to Gateway of Tally > F11: Features > Statutory & Taxation

  • Set Enable Value Added Tax (VAT) and Set/Alter VAT Details to Yes in F11: Features > F3: Statutory & Taxation screen and select the required State (if not already selected in company creation screen) where the business of the dealer is registered along with the Type of Dealer as applicable and Date of Applicability of VAT.
Specify the VAT TIN Number and Inter-state Sales Tax Number along with other details.
Activating CST in Tally.ERP 9
  • Press Enter to accept and save.

Note: CST feature is activated only when Use Indian VAT? Is set to Yes.

Implementation CST on Tally.ERP 9

Example :  SWAYAM ELECTRONICS is a Company located in Orissa and is the C& F of “SWAYAM PC” of  West Bengal who produced assembled PC, and supply it to their dealers in different States in India. This time they had purchased  25 nos of PCs @ 15000 each and the CST paid on the item @4% against Bill No-ABC123/08-09.

 

They have sold 10 PCs @ 20000 to their dealer in West Bengal  M/s Xcel IT Care against Bill No-SE001/08-09, CST charge on the Bill @ 4%.

 

To record the Transaction do the following…

 

Step-1 :            Create the following Ledger from

Gateway of Tally.ERP Ø Accounts Info Ø Ledger Ø Create (Single)

 

Ledger Name

Group

VAT Returns

VAT/Tax Class

Inter-State Purchase

Purchase

Yes

Interstate Purchase

Inter-State Sales

Sales

Yes

Interstate Sales

 

The Ledger Creation screen will be as shown below :

Go to Gateway of Tally > Accounts Info. > Ledgers > Create
Implementation CST on Tally.ERP 9
Implementation CST on Tally.ERP 9
  • Enter name for the Inter-State Sales ledger in the Name field.
  • Select Sales Accounts from the List of Groups in the Under field
  • Set Inventory Values are affected to Yes
  • Set the option Used In VAT Returns to Yes to display the VAT/Tax Class sub screen
  • Select the required VAT classification for e.g., Inter-state Sales from the list of VAT/Tax Class.
Implementation CST on Tally.ERP 9

Step-2 :           Create the CST Ledger from

Gateway of Tally.ERP9 Ø Accounts Info Ø Ledger Ø Create

Ledger Name

Group

Type

VAT / Tax Class

CST  @ 2%

Duties & Taxes

CST

Interstate Sales

CST on Purchase

Purchase

 

 

CST Payable Ledger

To create a CST Payable Ledger,

Go to Gateway of Tally > Accounts Info > Ledgers > Create

  • Enter the name of the CST Payable ledger in the Name field.
  • Select Duties & Taxes as the group name in the Under field.
  • Select CST from the Type of Duty/Tax list in the field Type of Duty/Tax.
  • Select Inter-State Sales in the VAT/Tax Class field from the VAT/Tax Class list displayed.
CST Payable Ledger in Tally.ERP9
  • The option Inventory values are affected is set to No by default.
  • Set the CST rate in the Percentage of Calculation field
  • On setting the Percentage of Calculation, the field Method of Calculation appears.
  • Select On Total Sales as the Method of Calculation.
  • Select the required Rounding Method from the list displayed.

CST on Purchases Ledger

To create a CST on Purchase ledger,

Go to Gateway of Tally > Accounts Info. > Ledgers > Create

  • Enter the name of the CST on Purchase ledger in the Name field.
  • Select Purchase Accounts as the group name in the Under field.
CST on Purchases Ledger in Tally.ERP9

Note *

(Note: The CST paid on purchases is treated as cost and added to the purchase value. The CST on purchases ledger when grouped under Duties & Taxes with type of tax as CST, will allow the appropriation of the CST paid on purchases value to the purchase cost. As a result the CST on purchases ledger will show zero value. The same behaviour can be obtained by altering the purchase group as shown below. )

  • Press Ctrl + Enter in the Under field to alter the Purchase Accounts group
  • In the Group Alteration (Secondary) screen, click F12: Configure and set Allow ADVANCED entries in Masters to Yes.
  • Set Used for Calculation (eg. Taxes, Discounts) to Yes or No as applicable.
  • Select Appropriate by Value from the list of Allocation Methods in the Method to Allocate when used in Purchase Invoice field.
CST on Purchases Ledger in Tally.ERP9
CST on Purchases Ledger in Tally.ERP9
CST on Purchases Ledger in Tally.ERP9
CST on Purchases Ledger in Tally.ERP9

Creating a CST Payment Voucher

Creating an Adjustment Entry for transferring the CST liability to CST payable ledger

The amount of CST to be paid at the end of the tax period has to be transferred to the CST payable ledger to capture the accurate value in the return form.

Go to Gateway of Tally > Accounting Vouchers > F7: Journal

  1. Enter the voucher Date
  2. Debit the CST @ 2% ledger grouped under Duties & Taxes with Type of Duty as CST and VAT/Tax Class set to Inter-state Sales
  3. Enter the value of CST liability in the Amount field
  4. Credit the CST Payable ledger grouped under Duties & Taxes with the Type of Duty as Others
  5. The amount to be credited appears automatically

The amount transferred to CST Payable account has to be paid using a payment voucher by using VAT payment button.

Creating a CST Payment Voucher

To Create the Payment Voucher,

In F12: Configure set Use Single Entry mode for Pymt/Rcpt/Contra to Yes

Go to Gateway of Tally > Accounting Vouchers > F5: Payment

  1. Enter the voucher Date
  2. Click the VAT Payment button or press Alt + V for VAT Payment Details sub screen to be displayed.
  3. In the Period From field, enter the period for which the payment is made.
  4. In the Payment towards field, select the Type of Duty/ Tax from the list displayed. Select CST for making payment towards CST.
Creating a CST Payment Voucher in Tally.ERP9
 
 
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