What is Sales Tax?

It is an indirect type of tax wherein the tax is applicable on purchase and sale of goods and services across the nation. Under sales tax system, amount charges are paid over and above the product’s base value. It is levied by the both central government and state governments and the recovery of the sales tax is followed by the purchaser. However, sales tax varies from state to state and the tax policies are decided by the central government to get it implemented for the traders in India.

In this post, we will discuss about the types of sales tax, exemptions, calculations, sales tax login and so on.

Types of Sales Tax

Sales Tax has been categorised into five types. Below given are the different types of Sales Tax:

1. Wholesale Sales Tax: This type of sales tax is levied on individuals who undertake the wholesale distribution of goods.
2. Manufacturer’s Sales Tax: Tax charged on the manufacturers in India of some specific goods is called as Manufacturer’s Sales Tax.
3. Value Added Tax: Under this type of sales tax, an additional tax is applied by the central government of all purchases of goods.
4. Retail Sales Tax: It refers to the tax levied on the sale of retail goods which is directly paid by the final consumer on purchase of goods.
5. Use Tax: This tax is applicable on the consumer for goods purchased without any payment of sales tax. The interesting fact about this tax is that it happens when a consumer buys goods from vendors who do not come under the tax jurisdiction.

Exemption under Sales Tax

There are some of the conditions under which certain categories do not come under Sales Tax. The prime aspect of exemption is to get rid of the possibility of double taxation. Below given are some of the exemptions under Sales Tax:

1. Specific goods exempted by the state government under the state’s categorised list of goods.
2. Any products sold to the educational institutions or charities are exempted.
3.  Products that hold valid state resale certificates from sellers

Sales Tax Violations

In case manufacturers and sellers violate the state sales tax laws, there are certain repercussions that they might have to face. In order to prevent themselves from committing any violation, it is important to know provisions of the law as mentioned below:

• Providing inappropriate or inaccurate information while filling up the CST forms
• Failing to obtain registration as per the CST Act
• False representation oneself as a dealer
• Providing fake or inappropriate statements about purchased goods
• Misappropriation of purchased goods at a discounted rate
• Not abiding the rules of the CST Act

Note: As Sales Tax has been replaced by Gods and Services Tax stating July 1, 2017, sales tax login has been transferred to GST login portal. Anyone wishing to login sales tax portal has to now visit the GST portal to access all the information and make tax payments.

Sales Tax- FAQs