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Central Sales Tax Act 1956 Video Lecture | Indirect Tax Laws - B Com

FAQs on Central Sales Tax Act 1956 Video Lecture - Indirect Tax Laws - B Com

1. What is the Central Sales Tax Act, 1956, and why was it enacted?

Ans. The Central Sales Tax Act, 1956, was enacted by the Government of India to regulate the levy and collection of tax on the sale of goods during inter-state trade or commerce. It was designed to facilitate the uniform taxation of goods sold across state borders, ensuring that there is no double taxation and that the states benefit from the revenue generated from inter-state sales.

2. Who is liable to pay Central Sales Tax under the Act?

Ans. Under the Central Sales Tax Act, any dealer who sells goods in the course of inter-state trade is liable to pay Central Sales Tax. This includes manufacturers, wholesalers, and retailers who engage in such trade. The tax is collected by the seller at the point of sale and is then paid to the appropriate state government.

3. How is the rate of Central Sales Tax determined?

Ans. The rate of Central Sales Tax is determined by the Central Sales Tax Act and is fixed by the Central Government. As of now, the maximum rate is 2% on the sale of goods. However, states may have specific provisions regarding the tax on certain goods, and the rate can vary based on the nature of the goods sold.

4. What are the exemptions available under the Central Sales Tax Act?

Ans. Various exemptions are provided under the Central Sales Tax Act for specific transactions. These include sales of goods that are exported outside India, sales to the government, and sales of goods that are not for the purpose of trade. Additionally, certain categories of goods may be exempt based on state legislation.

5. How does Central Sales Tax differ from State Sales Tax?

Ans. Central Sales Tax is levied on inter-state sales, while State Sales Tax is imposed on sales occurring within a state's borders. The Central Sales Tax is governed by the Central Sales Tax Act, 1956, whereas State Sales Tax is regulated by individual state laws. The revenue from Central Sales Tax is distributed among states based on their contribution to inter-state trade.

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Oct 23, 2025 Last updated

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