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Under CST law, the tax cannot be levied on sale of goods in course of import and export. Article 286 of the Constitution of India imposes restriction on levy of tax either on sale in course of export or import by a state government. The exemption is mainly to counter double taxation of foreign trade. Even the Government’s policy is to export goods and not to export taxes.   

Tax exemption on exports and penultimate sales  

As per Section 5(1) of CST Act 1956, sale is deemed to...

When a dealer is transferring goods to another state not as a result of sale but as stock transfer to any other place of his business ( branch, godown, warehouse etc.), then such transfer would not be liable for CST as per CST Act 1956. However, the burden of proving that the goods have not moved as a result of sale is on the dealer transferring such goods.     

In this article, an effort has been made to understand the concept of Form ‘F’ and few related issues with regard...

Following are the goods specified u/s 8(3) of CST Act 1956 in respect of which an interstate sale to a registered dealer is liable to tax at concessional rates i.e. 2% or state rate whichever is lower, provided that the transactions are covered by Form C: a. For resale or   

• For use in the manufacturing or processing of goods for sale or   

• For use in the mining or  

• For use in the generation or distribution of  electricity or any other form of power...

Exceptions to Restriction Under Rule 6  

The cenvat credit on capital goods, inputs and input services for a manufacturer could be as high as 9% of the basic value of goods sold/ removed. This is about 75% of the normal rate of 12%. Some goods fall under the 6% rate where the credit would probably be more than the applicable rate. In case of high investment, high level of stocking, direct or indirect export, there could also be an accumulation of credits. This accumulated situation...

The concept of Input Service Distributor (hereinafter in this article referred as “ISD”) is not new in Goods and Service Tax law. It carries the legacy from the Service Tax law.

1. The Concept

The need for ISD arose for providing a chance to the businesses who have multiple units in different locations to receive common invoice for the services attributable to different units at centralised location, in doing so the input credit is accumulated at the centralised unit. The ISD then...