Indirect Tax

Central Sales Tax

Interstate Sale:

A sale or purchase shall be deemed to take place in the course of interstate trade or commerce in the following cases:

• when the sale or purchase occasions the movement of goods from one State to another;
• when the sale is effected by a transfer of documents of title to the goods during their movement from one State to another.
Where the goods are delivered to a carrier, the movement of the goods is deemed to start at the time of such delivery and terminate at the time when delivery is taken from such carrier. Also, when the movement of goods starts and terminates in the same State, it shall not be deemed to be a movement of goods from one State to another.

State Sales Tax

Sales Tax- payable to and payable by:

Sales tax is payable to the sales tax authority in the state from which the movement of goods commences. It is to be paid by every dealer on the sale of any goods effected by him in the course of inter-state trade or commerce, notwithstanding that no liability to tax on the sale of goods arises under the tax laws of the appropriate state.

Principles of State Sales Tax Law:

1. The tax on the sale or purchase of goods is at single point.
2. Under the provisions of some state laws the assesses are divided into several categories such as manufacturer, dealer, selling agent etc. and such assesses are required to obtain a registration certificate to that effect.
3. Generally , a quarter return of sales or purchases is insisted upon and the assessee is required to furnish the return in the prescribed form.
4. At the time of assessment, the assessee has to furnish all the documentary evidence to the concerned sales tax / commercial tax officer.
5. Every dealer should apply for registration and obtain a registration certificate to that effect. The registration certificate number should be quoted in all the bill / cash memos.
6. In case an assessee prefers to make an appeal, he has to abide by the procedure of the sales tax laws of the state.
Exception in the sales taxes
• Sales to resellers such as wholesalers and retailers that have a valid state resale certificate.
• Sales to tax-exempt institutions such as schools or charities.