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If you are associated with business, taxation or finance, then you must have heard the name of CST (Central Sales Tax). But do you know what CST full form, and what kind of tax is it?

In today’s blog, we will know about the full form of CST in finance, its importance, rate, and how it impacts business transactions in detail. Let’s start without any delay!

what is the Full Form CST?

• Central Sales Tax

• CST was an indirect tax levied on inter-state sales (goods sold outside the state) in India.
• The Government of India levied the CST, and state governments collected it.
• The ‘Central Sales Tax Act, 1956’ regulated the Central Sales Tax.
• CST was levied only on interstate sales, not on sales within a single state.

Note: CST has been largely replaced by GST (Goods and Services Tax) since July 1, 2017. But it is still used in some cases.

Know about the full form of FCA

What is CST? (What is Central Sales Tax)

Central Sales Tax (CST) was an indirect tax which was levied on the sale of goods from one state to another.

• If a businessman sold goods from Delhi to Mumbai, he had to pay CST.
• But if the same businessman was selling goods only within Delhi, then not CST but VAT (Value Added Tax) was levied on him.
• State Sales Tax Departments collected CST. The central government regulated it

When did the CST apply?

If the seller and buyer were in different states, CST was applicable.

• If the buyer is registered and issues a “C Form”, a lower rate of CST was applicable.
• For unregistered buyers, CST was equal to the state VAT.

Important features of CST full form

CST applied to goods that states sold to each other

• State Government Collection CST was collected by the state government, but the rules were made by the central government.
• Indirect Tax – CST did not have a direct impact on customers, but on businesses.
• Fixed Rates – CST rates were decided according to the type of goods and the registration status of the buyer.
• No Input Tax Credit (ITC) – Businesses did not get input credit of CST, which is possible in the case of GST.

CST vs VAT vs GST– What is the difference?

Category	CST	VAT	GST
Applicable on	Interstate Sales	Sales within Same State	All Sales (Intra + Inter State)
Collection by	State Government	State Government	Central & State Governments
Tax Credit Available?	NO	Yes	Yes

• After the implementation of GST in 2017, CST has been replaced by IGST (Integrated GST).

How was CST registration done?

If a business had to do interstate sales, it had to get CST registration done. This was done through the Sales Tax Department.

CST Registration Process

• Online or Offline Application – Business had to apply for the CST number.
• Business Documents Required – PAN Card, Address Proof, Bank Account Details.
• Security Deposit – In some states, a security deposit had to be given for CST registration.

Is CST still applicable today in India?

No! After the introduction of GST on 1st July 2017, the importance of CST has ended.

• Interstate transactions now come under IGST.
• CST is still used only in some specific cases, like petroleum products and alcohol.

Note – Now businesses do not have tension about the tax structure of different states, because GST is a unified tax system.

FAQ– Questions and Answers about Central Sales Tax

The most important thing to remember is

CST was an important tax system used for interstate sales in India. But after the implementation of GST, its use has reduced considerably.

• IGST has replaced CST
• Businesses can now get tax credit
• A simple and efficient tax system has been created

In this article, we explored the full form of CST (Central Sales Tax) and its significance in various contexts. Understanding such abbreviations not only enhances our knowledge but also helps in better communication. If you found this information helpful, feel free to explore more full forms on DoubtHub.com and expand your understanding. Stay informed, and keep learning with us!