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Q Base : CST - Transit Sales against E1 and E2 Forms' @ Tally.ERP 9

2012-08-03T12:47:00.004-07:00

'Transit Sales against E1 and E2 Forms' @ Tally.ERP 9

According to Section 6(2) of the CST Act, the first inter-state sale is taxable and the subsequent sale duringmovement of goods by transfer of documents is exempt from tax, if the sale is made to a registered dealer.

Let us consider the following example :

On 13-4-2009, M/s. Oriental Traders despatched the following goods to M/s. Star Power Controls, Orissa and raised an Invoice on M/s. Swastik Associates in Madhya Pradesh and charged 4% CST against C Form

Product Description	Quantity	Rate
Black Matt	300 Kgs	240
Chocolate Brown	50 Kgs	270
P.O. Red	50 Kgs	245

During the movement of goods, Swastik Associates subsequently sold the goods to M/s. Rainbow Colours inWest Bengal and Rainbow Colours ultimately sold the goods to M/s. Star Power Controls in Orissa.

On the same day, Oriental Traders received C Form vide No. TC-2K-15023 dt. 13-4-09 from

Swastik Associates and issued E1 Form vide no. TE-1Q-0130 dt. 13-4-09.

In this case, sale from Swastik Associates to Rainbow Colours and Rainbow Colours to Star Power Controls is byway of transfer of documents. Oriental Traders has to receive C Form from Swastik Associates and will issue an E1Form to Swastik Associates. Later, Swastik Associates will issue E2 Form to Rainbow Colours and receive C Form. Finally, Rainbow Colours will issue E2 Form to Star Power Controls and receive the C Form.

Chart showing movement of goods under E1 and E2 :

Create the following Party Ledger

Central Sales Tax (CST)

Ledger	Under	Maintain balances bill-by-bill	Inventory values are affected
Swastik Associates	Sundry Debtors	Yes	No

The entries to be made in the books of M/s. Oriental Traders with regard to the above transaction are given in the following pages.

Enter the details of the trasaction in a Sales Invoice

Setup :

‡ Press F12: Configure and set Yes to

„ Allow separate Buyer Consignee names

„ Activate ‘E1’ or ‘E2’ Transaction

Go to Gateway of Tally > Accounting Vouchers > F8: Sales.

‡ Change the date to 13-4-09.

‡ Select Swastik Associates in the Party's A/c Name and press Enter to view the supple- mentary details screen.

‡ In the Buyer details section enter the following details and accept the screen

„ Consignee: Star Power Controls

„ Address: B-3/114, Bhusan Vihar, Bubaneshwar, Orissa

„ Buyer: Swastik Associates

„ Address: 603, Marvel Complex, Madhya Pradesh

‡ Enter the details of the transaction in a Sales invoice and accept the default bill allocations in the Bill-wise Details screen.

The completed Sales Invoice appears as shown below:

‡ Press Y or Enter to accept the screen.

Q Base (CST) : Inter-State Sales against C Form' @ Tally.ERP 9

2012-08-03T12:44:00.003-07:00

Inter-State Sales against C Form@Tally.ERP 9

On 7-4-2009, M/s. Oriental Traders sold the following items to M/s. Sunrise Industries, Delhi against C Form. The freight charges of Rs. 750 were included in the Invoice.

Product Description	Quantity	Rate
Black Matt	100 Kgs	240
Golden Yellow	20 Kgs	365
Metallic Blue	10 Kgs	290

Enter the details of the transaction in a sales invoice

Setup :

‡ Create a ledger Freight charges under indirect expenses.

The completed Sales Invoice appears as shown below:

‡ Press Y or Enter to accept the sales invoice

Q Base : CST - Entering Inter-State Purchase Inovice' @ Tally.ERP 9

2012-08-03T12:36:00.003-07:00

'Entering Inter-State Purchase Inovice' @ Tally.ERP 9

On 5-4-2009, M/s. Oriental Traders purchased the following items from M/s. Unique Paints (P) Ltd. Goa, vide Invoice No. 2458/08-09, amounting to Rs. 148500.

Product Description	Quantity	Rate
Black Matt	500 Kgs	190
Golden Yellow	100 Kgs	285
Metallic Blue	100 Kgs	250

Enter the details of the transaction in a Purchase Invoice.

Setup :

‡ In the F12: Configuration, set Use common ledger A/c for item allocation to Yes.

The completed Purchase Invoice appears as shown below:

‡ Press Y or Enter to accept the screen

You can also fill the Form No. during the Voucher Entry, if the forms are issued at the time of purchase. But usually, theyare submitted at the end of the year covering all the transactions from that dealer during the year.

Q Base : CST : Enabling CST and Creating Master Ledgers' @ Tally.ERP 9

2012-08-03T12:32:00.003-07:00

'Enabling CST and Creating Master Ledgers'@ Tally.ERP 9

Central Sales Tax integrated in Tally.ERP 9 takes care of your inter-state transactions. It elimi- nates error-proneinformation and comments on appropriate forms to be issued/ received at the end of the month or a financial year or at any point of time. It takes a one-time configuration in Tally.ERP 9 for Central Sales Tax features to be activated.

Company Setup

Create a new company - Oriental Traders to understand the CST Feature of Tally.ERP 9.

Oriental Traders is a registered dealer under the CST Act and is one of the leading all India dis- tributors of industrial powder paints. It purchases various shades of powder paints from Unique Paints (P) Ltd. Margao, Goa and supplies to registered dealers outside the State on submission of the prescribed formats.

‡ Enter the details in the Company Creation screen as shown below

‡ Press Y or Enter to accept the company creation screen.

Central Sales Tax (CST)

‡ Enable VAT, by activating Enable Value Added Tax (VAT) and Set/Alter VAT details in the F11: Features(Statutory and Taxation Features). Once VAT is enabled, Statutory Masters related to VAT and CST are also automatically loaded in Tally.ERP 9

Creating Masters

i. Purchases and Sales Ledgers

Ledger	Under	Inventoryvalues are affected	Used inVATreturns	VAT/Tax Class
CST Sales	Sales Accounts	Yes	Yes	Inter-State Sales
CST Purchases	Purchase Accounts	Yes	Yes	Inter-State Purchase

ii. Party Ledgers

Ledger	Under	Maintain balances bill-by-bill	Inventory values are affected
Sunrise Industries	Sundry Debtors	Yes	No
Unique Paints (P) Ltd.	Sundry Creditors	Yes	No

iii. Output CST Ledger

Ledger	Under	Type of Duty/Tax	VAT/Tax Class	Inventoryvalues are affected	Percentageof calcula- tion	Method of calculation
CST @ 4%	Duties and taxes	CST	Inter-State Sales	No	4	On Total Sales

iv. Input CST ledger

Ledger	Under	Inventoryvalues are affected	Used in VAT Returns	VAT/Tax Class
Input CST	Purchase accounts	Yes	Yes	Not applicable

V. Stock Items

Name of Item	Under	Units of measure
Black Matt	Primary	Kgs
Golden Yellow	Primary	Kgs
Metallic Blue	Primary	Kgs

Q-Base : Central Sales Tax (CST) Meaning & Basics' @ Tally.ERP 9

2012-08-03T12:27:00.004-07:00

'Central Sales Tax (CST) Meaning & Basics' @ Tally.ERP 9

Sales Tax is a tax levied on the sale of goods. In India, the law for levying sales tax is provided in the Central SalesTax Act of 1956 which applies to the entire country.

Generally, the CST Act does not deal with intra-state or import or export sales. However, with respect to certaindeclared goods such as oil seeds, sugar, pulses, crude oil etc., the CST Act imposes restrictions on the powers of state governments to levy sales tax even in the case of intra-state sales.

Accordingly, sales can broadly be classified into three categories.

‡ Intra-State sales, i.e, sales within the state.

‡ Sales during import and export.

‡ Inter-State sales.

The Act also provides for the levy, collection and distribution of taxes on sale of goods in the course of inter-state trade or commerce.

Basics of Central Sales Tax (CST)

It is important to understand the meaning of certain terms used in the CST Act.

Inter-State Sale

Inter-state sale is deemed to take place if there is: (i) Movement of goods from one state to another or

(ii) Transfer of documents of title to the goods during their movement from one State to another. The above two modes are mutually exclusive.

Declared Goods

Declared Goods means goods declared under Section 14 to be of special importance in inter- state trade orcommerce. Some of the important items are cereals, iron and steel, jute, oil seeds, pulses, man-made fabrics etc.

Registration under CST Act

Every dealer who carries out the inter-state sales is liable to pay Central Sales Tax. As per the CST Act, every dealer who carries out inter-state sales has to be registered with the Sales Tax Authority. Intermediaries like agents and transporters are not required to be registered, since they do not affect sales. Registered dealers can purchase goods at concessional rates by issuing the C Form.

Rate of Central Sales Tax

Different rates are prescribed depending upon the nature of inter-state sale such as:

a. Sale to registered dealers.

b. Sale to unregistered dealers.

(i) Sale of declared goods to unregistered dealers.

(ii) Sale of goods other than declared goods to unregistered dealers. CST rates to various categories are discussed below:

a. Sale to Registered Dealers

Sale to registered dealer is @ 4% or sales tax rate for sale within the State, whichever is lower, if the goods areeligible and are specified in the Registration Certificate issued to the purchasing dealer. The Purchasing dealer has to submit the declaration in the prescribed C Form to the selling dealer.

b. Sale to Unregistered Dealers

The rate is twice the rate applicable to sale or purchase of such goods within the State with regard to declared goods. In case of goods other than declared goods, the rate applicable for sale within the state or 10%, whichever is higher. The purchaser is not required to give any declaration as he is not a registered dealer

Forms for Declarations under CST Scheme

A registered dealer has to issue certain declarations in prescribed forms to buyers/ sellers. The Dealer has to issuedeclarations in the forms such as C, E-I, E-II, F and H which are printed and supplied by the Sales Tax Authorities. These forms are generally in triplicate

Form C

As per CST Act, sales tax on inter-state sales is 4% or sales tax rate for sale within the state, whichever is lower, isapplicable, when the sale is made to a registered dealer and the goods are covered in the registration certificate of the purchasing dealer. Otherwise, the tax is higher, i.e

10% or tax leviable on sale of goods inside the state, whichever is higher. This concessional rate is applicable only if the purchasing dealer submits a declaration in prescribed C Form.

One C Form covers all the transactions in a whole financial year, irrespective of the total amount or value of transactions during the year. However, for transactions exceeding one financial year separate C Form is required for each financial year.

FormsE1and E2

According to Section 6(2) of the CST Act, only the first inter-state sale is taxable and the subse- quent sale during movement of goods by transfer of documents is exempt from tax, if the purchas- ing dealer is a registered dealer.

Usually, the transfer of a document refers to the document of title to goods which is endorsed and transferred in favour of the purchaser and is duly signed by the endorser. The document can be further transferred by subsequent endorsements

The subsequent sellers have to obtain a declaration in C Form from the dealers who sold them the goods. Theselling dealer has to make a declaration in E1 Form in case of the first sale and E2 Form in case of subsequentsales.

Form F

Under CST Act, F Form is used for Branch transfers and Consignment transfers. Goods when transferred from one place to another under the same principal, is known as Branch Transfer and when it is transferred to agents, it is termed as Consignment Sale. Here the dealer has to furnish a declaration in F Form received from the consignment agent or branch office in another state to prove that the interstate movement of goods is not a sale.

One F Form covers all transactions in one month, irrespective of the number of transactions and the total amount.

Form H

A sale during the course of export is exempt from CST and also the penultimate sale is deemed to be in course of exempt from CST under the CST Act. The dealer exporting the goods must have documents in proof of export such as an airway bill, bill of lading, shipping bill, customs docu- ments, bank certificate etc. However, if the penultimate seller is not having any proof evidencing that the sale is exempt, the actual exporter is required to issue a certificate in H Form to the penultimate seller.

Form I

Special Economic Zone (SEZ) is a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations, duties and tariffs.

Under the CST Act, supplies made by a registered dealer to a unit in the Special Economic Zone (SEZ) will not be subject to CST, provided such unit furnishes a declaration in I Form

Enable and Create Price Lists

2012-04-15T13:51:00.004-07:00

Enable and Create Price Lists

Ensure that the company has Accounts with Inventory set up.

In F11:Features (F2: Inventory Features)

· Ensure Allow Invoicing is set to Yes

(The option for Price Lists will not be available without the facility of invoicing)

· Set Use Multiple Price Levels to Yes

Type out the price levels that you wrote on paper earlier:

Accept each screen of the Company Features by pressing the Enter key (do not press escape) and return to Gateway of Tally.

Alter Price Level names
To alter the name of a price level, go through the same procedure as enable and create Price Levels.

Assigning Ledger Accounts to Price Levels

An activated Price List feature enables an option in the party (debtor and creditor) ledger accounts where it can be assigned or tagged to a specific price level. An account can be assigned only to one Price Level, You can Alter the existing ledger account to assign them to a price level.

The option 'select a Price Level will be available' if it is a new ledger account. Either way, the options will be the same and therefore, we will take alteration of an account as an example.

Go to Gateway of Tally > Accounts Info > Ledger > Alter (single)

Select the ledger account, e.g. Bright Traders
Tab down to Pricing Level Applicable and select Dealer
Accept the rest of the options and return to Gateway of Tally.

Note:
1. You may assign other ledger accounts in the same manner.
2. It is not mandatory to carry out the assigning activity before creating the price lists. That can be done even after the price lists are created.
3. The Pricing Level can be changed to reflect changed circumstances. For this, simply alter the ledger account and select a different pricing level option.

List all the Stock Items in the Price List

By default, the Price List will list the last updated Stock Item under List of Items. However, all the Stock Items (for the selected Stock Group) may be listed through configuration settings.

Procedure

· Go to Gateway of Tally > Inventory Info > Price List > Stock Groups

· Press F12: Configure and set the option Show All Items for Price Level to Yes.

· Select the required Stock Group

· The Price List screen with the list of all the Stock Items of the selected group is displayed as shown:

2012-04-05T00:24:00.000-07:00

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