Inter-State Vs Intra State – Sale/Purchase
Registered dealers are eligible for certain concession or exemption of tax on inter-State transactions Under the Central Sales Tax Act, 1956 (in short CST), if dealer is able to comply with certain conditions.
By Submission of statutory forms like Form C, F, H, I, E-I or E-II etc. However before dealing with the procedural issues involved in obtaining or submitting these Forms it is more important to understand few concepts like what is ‘intra-State transaction’ or ‘Inter-State transaction’ because once nature of transaction is established, it would be very easy to know that whether VAT is applicable of central Sales Tax (CST) and then procedural compliance can be done easily.
As per constitution, tax on inter State sale/purchase can be levied only by Union Government while tax on ‘sale within State’ can be levied by the State Government.
In general, sale where seller and buyer both are from same state is called as intra state sale for example “seller of Kanpur (U.P.) sells goods to a dealer of Noida (U.P.)