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Central Sales Tax : The Basics You Need to Know

The Central Sales Tax (CST) is a tax imposed on inter-state trade or sales of goods. It is imposed by the Central Government of India under Entry 92A of List I (Union List) of the Seventh Schedule to the Constitution of India. However, the liability of collecting the tax in such case is that of the state government from where the goods were sold. The Central Sales Tax is an indirect tax levied on consumers which were enacted under the Central Sales Tax Act in 1956. Within a state, the seller or a dealer of goods is responsible for collecting the State Sales Tax on the sale of goods and Central Sales Tax in case of an interstate trade or sales of goods. Therefore, the state government which collected the tax gets the tax revenue also.

Central Sales Tax basics need know


  • “When any transaction between two parties from different states records the movement of goods then it is called interstate transaction.”
  • “A sale, effected by transfer of documents of title to goods when goods are in interstate movement, is also an interstate sale.”
  • However, transfer of goods to branch or other offices or consignments to agents are not considered an interstate sale.
  • “Goods that are sold within a state, but while transporting travel through another state is not considered inter-state sales.”

OBJECTIVES OF CST ACT Central Sales Tax basics need know

  • To outline the principles for determining Inter State Sale (ISS) or Sale outside a state or Import sale or Export sale.
  • Declaring certain special importance goods (Called Declared goods).
  • “Provide for the levy, collection, and distribution of taxes on the sale of goods in the course of inter-State trade.”
  • Specification of conditions and restrictions on state laws imposing taxes on declared goods.
  • “To provide for the collection of tax in the event of liquidation of a company.”


  • The sale should not take place of the course of import into or export from India.
  • The registration of the dealer under the CST Act.
  • The sales of goods should be made by the dealer to any buyer whether registered or not.
  • He should make a sale of any goods.
  • He should carry on any business.
  • The sale should be made in course of interstate trade or commerce.


To register for CST, it is mandatory for all Manufacturers/Traders /Dealers/Exporters to obtain his TIN registration number first. TIN is abbreviated for Taxpayer Identification Number allotted by Commercial tax department of the respective States VAT as a unique number. It is a single number allotted to the dealers for the purpose of registration of VAT and CST.

Following are the mandatory documents required to apply for a TIN registration:

  1. ID Proof
  2. Address proof
  3. PAN card of proprietor
  4. 4 to 6 photographs
  5. Address proof of Business premises
  6. 1st Sale / Purchase Invoice
  7. copy of LR/GR & payment/collection proof with a bank statement
  8. Surety/Security/Reference

Form D: Form D is issued by the Govt. Department which purchases the goods in order to avail the following concession:
4% tax or applicable sales tax rate for the particular sale within that State whichever is lower.
Form I: Form I is issued by a dealer/buyer located in a Special Economic Zone in order to avail the following concession:
No tax is imposed on the sales made to a dealer located in Special Economic Zone (SEZ).

Setindiabiz is a leading CST Registration service provider which can help you acquire your TIN number without any hassles. For any further queries pertaining to CST registration, you can call us at +91-8010660055 or visit

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Setindiabiz is an organized team of experienced CA, CS, & Lawyers, duly supported by a pool of trained accountants & paralegal staff that provides quality & affordable compliance services to startups & small businesses in India. The views, statements and recommendations expressed in this article or post are only for the sole objective of providing information, and it does not constitute professional advice or recommendation of the company. Neither the author nor the company or its affiliates accepts any liability for any loss or damage arising from any information in this article or any actions taken in reliance thereon.

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