CST

CST - INTRODUCTION

CST stands for 'Central Sales Tax' and this tax charge by the central government of India and its apply only when a sale or purchase of goods occur from one state to another state.

Therefore it applies only two transactions, which are described below. 

1. Interstate Sales: The interstate sales occur when we sell goods from our home state to another state. 

For example we sales goods from Delhi to Mumbai. 

2. Interstate Purchase: The interstate purchase occurs when we purchase goods from other states.

For example, we purchase goods from Mumbai to our home state.

FEATURES OF CST
1. CST is an example of indirect tax.

2. Its only applies to Interstate Sales and Interstate purchase

3. It's mostly charge @ 2% with Form C


STEPS TO ACTIVATE CST

1. Open an already existing company

2. Press “F11” key.

3. Select “Statutory & Taxation”

4. Make “yes” to “Enable Value Added Tax (VAT)” and “Set/Alter VAT Details”

CST LEDGER

Ledger name: CST @ 2% A/c

Under: Duties & Taxes

Type of Duty/Tax: CST

Default VAT/Tax Class: CST @ 2% Against Form C

CST SALES LEDGER

Ledger name: Inter-state sales a/c

Under: Sales a/c

Used in VAT Returns: Yes

VAT/Tax Class: InterState Sales @ 2% Against Form C

CST PURCHASE LEDGER

Ledger name: Inter-state purchase a/c

Under: Purchase a/c

Used in VAT Returns: Yes

VAT/Tax Class: Interstater Purchase @ 2% Against Form C

CST VOUCHER ENTRIES

We normally use Sales and Purchase vouchers to insert InterState sales and InterState purchase entries.

Steps For Interstate Sales
1. Open Sales Voucher.

2. Insert "Cash a/c" in Party's A/c name.

3. Insert "InterState Sales a/c" under "Sales Ledger"

4. Insert stock item's details.

5. Apply CST ledger and save the voucher.

Steps For Interstate Purchase
1. Open Purchase voucher.

2. Insert "Cash a/c" in Party's A/c name.

3. Insert "InterState Purchase A/c" under "Purchase Ledger"

4. Insert stock item's details.

5. Apply CST ledger and save the voucher.

PRACTICE QUESTION

COMPANY NAME: SHYAM STATIONARIES

INVENTORY DETAILS 

Stock Item	Brand/Company	Quantity	Price	Sales Price
Ball pen	Cello	400 (packet)	70	85
Notebook	PaperClip	500 (Piece)	35	40
Non-Dust Eraser	HP	400 (“ “ )	4	5
Pencil	HP	450 (packet)	40	55
Diary	PaperClip	600	40	50

LEDGERS ENTRIES

Cash in hand Rs. 4,00,000

Cash at bank Rs. 12,00,000

Furniture A/c (Total Amount Rs. 50,000)

Ceiling Fan A/c (Total Amount Rs. 15,000)

VOUCHER ENTRIES

1. Sold goods for cash (20 Packets Pencil, 100 Notebook) with CST 2%

2. Depreciation 5% on Ceiling Fan.

3. withdraw cash Rs. 5,00,000 from bank to office use.

4. Sold goods for cash (250 Diaries) with 2% discount.

5. Purchase goods on credit(200 Notebook, 400 diaries) by Anil Stationary with CST 2%

6. Depreciation 7% on furniture. 

7. Paid Rs. 50,000 to Anil Stationary by cheque.

8. Sold goods on credit (50 Pencil, 40 Eraser,) to Mr. Krishna with CST 2% 

9. Withdraw cash Rs. 15,000 from office to personal use. 

10. Purchase goods (250 Eraser, 200 Pencil) with 5% discount.

11. Return defected purchased goods (10 Pencil)

12. Sold goods (70 Ball pen, 100 Diary, 100 Pencil) with 4% discount.

13. Return defected sold goods (10 Dairy, 5 Ball pen)