A dealer shall be liable to pay tax under the CST Act on the sale of any goods effected in the course of inter- State trade though no tax can be levied under the local sales tax Act of the appropriate State if such sale is Intra state sale.
Yes, Sec.6 (1) of CST Act provides that every dealer shall be liable to pay tax under this Act on all sale of goods (other than electrical energy) effected by him in the course of inter-state trade. Goods here include all materials/articles/ commodities and other kinds of moveable property. The definition of goods however excludes electricity, newspapers, stocks and shares.
VAT is intended to tax every stage of sale where some value is added to raw materials, but taxpayers will receive credit for tax already paid on procurement stages. VAT can be imposed only when tangible goods and products are sold. Every state has a separate and distinct VAT act reserved for their state
VAT is intra state and CST is inter state.
Section 6(2) of CST Act gives an exemption to subsequent interstate sale affected by transfer of documents of title to goods when the goods are in movement from one state to another. However such exemption to subsequent inter-state sale is subject to production of Form E-I, as obtained from prior vendor and ‘C’ form from buyer.
You are required to get VAT registration even if you are doing trading online.
The dealers involving in e-commerce should disclose and pay VAT or Central Sales Tax for all transactions through e-commerce portals and if they fail to do so, legal action will be taken against them by the commercial taxes department. If the online retailer delivers goods from the State to a consumer in another State, Central Sales Tax is payable.