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Mukesh (Manager)     26 June 2012

Vat/cst or service tax

Dear Experts,

i am going to start an online store where in i will be selling fashion related items, i have registered to firm as propritership in MP, i want to know which tax will be applicable . Sales TAX or Service TAX and what is the % Rate for both.

Kindly guide me I have no clue for this.

Thanks in Advance



Learning

 7 Replies

Sankaranarayanan (Advocate)     26 June 2012

VAT is must , it is vary from material to material. only sell the product then VAT is enough, Get the application in the official loacal state website and apply it

1 Like

Rohan Sumungal (na)     26 June 2012

"Fashion Related Items" is a rather vague term. Your rate of VAT will depend on the exact nature of the item being sold. Where not covered by name under the State Schedule of the VAT Act, it will be chargeable under the residual category which is a flat rate varying between 12-14% between states. 

For items shipped outside MP you will require to remit Central Sales Tax and VAT will not apply. The current for this rate is 5 percent without what is called a C-Form.

I don't think service tax will be applicable to your kind of business.

Mukesh (Manager)     26 June 2012

Thanks saurabh,

So that means i need to get the VAT and CST both registered, can you please guide me with the proceedure and expense to register for both.

thanks once again

Mukesh (Manager)     26 June 2012

I also want to know in case i ship out of india than also I need to pay CST only not the VAT if i am not wrong.

Thanks

Mukesh (Manager)     26 June 2012

thanks sir for your reply, I want to know if i ship the item out of MP or out of INDIA which TAX will be applicable.

and what is the proceedure to get the registration done.

Thanks

Rohan Sumungal (na)     27 June 2012

You do not need to pay any form of sales tax on exports, they are exempt.

 

It would be best for you to take a look at your state tax department website to understand the procedure. It shouldn't cost too much the fees are typically fairly reasonable but vary from state to state. I would suggest you pay a visit to your local commercial tax office and get guidance from them. They are typically quite helpful with this sort of thing.

CA. Vikash Dwivedi (Chartered Accountant)     20 July 2012

Sale with in MP yu will have to pay Commercial tax, out of MP CST, and out of India Export duty.


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