IS CST MANDATORY FOR INTER STATE SALE

QUESTION-

From- Saideep

I got your contact from your blog, I am planning to start a e-commerce website and sell some t-shirts,mugs and caps but am confused on what taxes apply here,  do i have to register for both CST and Vat and how much percentage do they attract.
Looking forward for your response.

ANSWER-

Hi Saideep,

Thanks for posting your query, please get your answer below:

1. If your E-commerce website would be directly selling in its own name then it would have to collect VAT from the buyers and be paid to the Sales Tax Department of the concerned state. If its working on a commission basis model then register it with Service Tax Department and collect service tax.

2. If working on directing selling model. Then there are 2 types of registration i.e. VAT and CST. CST is collected at the time of Inter State Sale i.e. when you sell from one state to another state. VAT is collected when goods are sold in same state.

3. Since its an E-commerce website, you will sell goods all over India and thus you will have to take both the registrations. The rate would be same whether you sell local or to other states. But if the buyer provide you with form C, you can charge CST @ 2%.

4.  The rate differs from state to state and thus rates can be told until the state where business will be registered will be told.